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Business Management: empowering employees to satisfy customers

economies of scale

the situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase


a system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person

chain of command

the line of authority that moves from the top of a hierarhy to the lowest level


an organization with many layers of managers who set rules and regulations and oversee all decisions

centralized authority

an organization structure in which decision making authority is maintained at the top level of management at the company's headquarters

decentralized authority

an organization structure in which decision making authority is delegated to lower level managers more familiar with local conditions than headquarters management could be

span of control

the optimum number of subordinates a manager supervises or should surpervise

tall organization structure

an organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of magement

flat organization structure

an organization structure that has few layers of management and a broad span of control


the dividing of organizational functions into separate units

line organization

an organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor

line personnel

employees who are part of the chain of command that is responsible for achieving organizational goals

staff personnel

employees who advise and assist line personnel in meeting their goals

matrix organization

an organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure

cross-functional self-managed teams

groups of employees from differrent departments who work together on a long-term basis


using communications technology and other means to link organiztions and allow them to work together on common objectives

real time

the present moment or the actual time in which something takes place


a concept that describes a company being so open to other companies working with it that the once-solid barriers between them become see-through and electronic information is shared as if the companies were one

virtual corporation

a temporary networked organization made up of replaceable firms that join and leave as needed


coomparing an organizations practices, processes, and products against the worlds best

core competencies

those functions that the organization can do as well as or better than any other organization in the world


redesigning an organization so that it can more effectively and efficiently serve its customers

inverted organization

n organization that has contact people at the top and the chief executive officer at the bottom of the organization chart

organizational (or corporate) culture

widely shared values within an organization that provide unity and cooperation to achieve common goals

formal organization

the structure that details lines of responsibility, authority, and position; that is, the structure shown on organization charts

informal organization

the system of relationships and lines of authority that develops spontaneously as employees meet and form power centers; that is, the human side of the organization that does not appear on any organization chart

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