The Building Blocks of Organizational Structure

  1. Objective 6-2 Explain specialization and departmentalization as two of the building blocks of organizational structure.

The first step in developing the structure of any business, large or small, involves three activities:

  1. Specialization. Determining who will do what

  2. Departmentalization. Determining how people performing certain tasks can best be grouped together

  3. Establishment of a Decision-Making Hierarchy. Deciding who will be empowered to make which decisions and who will have authority over others

These three activities are the building blocks of all business organizations. In this section, we discuss specialization and departmentalization. Because the decision-making hierarchy actually ...

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