Chapter 8

Organizing for Success

Identifying the Critical Tasks

Critical tasks are the activities that must be

done well if the business is to achieve its purpose and objectives

Critical tasks must be allowed to function

smoothly and without restriction within the organizational structure

Four Principles of Organizational Design

1. Keep the organizational structure simple 2. Give critical tasks prominence and allow

them to function without restriction

3. Keep support staff to a minimum 4. Keep working units small

Ways to Organize
1. Organize by business function
2. Organize by product 3. Organize by geographic area

Line and Staff Activities

Line activities are activities that directly

affect the accomplishment of the firms purpose and objectives (e.g., sales, production)

Staff activities are activities that indirectly

support the accomplishment of the firms purpose and objectives (e.g., human resource, legal)

Approaches to Decision-Making
Centralized decision-making system: all the

decision-making authority is held by a few top executives

Decentralized decision-making system:

decision-making authority for routine matters is delegated to lower levels of management

Deciding Where Decisions are Made

Decisions best made at the lowest levels
1.

Decisions best made at the highest levels

Affect the firm for a long period of time Involve large amounts of money Dramatically affect the businesss purpose and objectives

2.
3.

Affect the firm for a 1. short period of time Involve small amounts 2. of money Do not affect the 3. businesss purpose and objectives

Decisions should be made at the lowest levels in the organization possible

Selecting the Best Organizational Structure

Autonomous profit centers 1. Put people in charge of their own destiny 2. Offer fast feedback on performance 3. Keep work units small enough to provide a sense of involvement and achievement 4. Can be accomplished with a minimum number of management levels

corporation

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Discussion Questions
1.

Identify and explain the four functions of management and the role that organizing plays in the successful operation of an agribusiness. Develop an example to illustrate your argument. What are the critical tasks in a business? How does a manager go about finding them? What part do they play in the organizational structure of the firm? Identify and define the four principles of effective organizational design. Describe how they relate to one another and to the success of the agribusiness.

2.

3.

Discussion Questions
4.

5.

Compare and contrast three ways to organize a business. Describe advantages and disadvantages of each. Describe a selection procedure and criteria for selecting the best one. Describe the difference between line and staff activities. Give two examples of each. In an era where firms seek to be lean and mean would you rather have a line or staff position?

Discussion Questions
6.

7.

Describe a situation where you would want to use centralized decision-making. How would you classify the decision-making system of the U.S. Army? Your university? A group you belong to? Would you change the system used in any of these cases? Explain the reasons for your answer including the criteria you use to make it. Explain how the level at which decisions are made has important implications for the longterm performance of an agribusiness.

Discussion Questions
Identify and explain the types of decisions that must be made by top management for an agribusiness to flourish. 9. Identify and design a program to develop the decision-making skills of agribusiness managers. Give reasons for each part of your program. 10. Explain why agribusinesses need autonomous profit centers to have good managers 10 years from now.
8.