BUS 101 Introduction to Business

Week 10 Organization and Human

Resources
Topics for discussion
Setting up the right organizational structure
Culture
HR issues
Role of the human resource department
Offshoring and outsourcing
Remote or home offices
Equal employment laws
 CEO

Top
Managers

Traditional Middle
Organizational Structure Managers
Hierarchical
Top down approach to
management
Used by most large
First Line Managers
companies
Hierarchical organization
Advantages
Can work for large organizations IF
the number of middle
management is kept in check
Works well for process-oriented
organizations that require strict
control and oversight (example:
manufacturing)
Potentially, an easier coordination
advantage
Disadvantages
Information trickles from the top all
the way down and often times gets
distorted (intentional or not)
Slow to react to changes
Increased bureaucracy
Unhealthy competition for the top
positions
Increased costs
Increased responsibilities at lower
level and decreased authority
Flat organization
Flexible teams
organized by project
Cross-functional
Team members take turn be the leaders

Used by high tech companies

Hierarchical organization
Advantages
Nimble, flexible organization that
can quickly adapt to changes
Revolving leadership = invested
interest in succeeding
Bringing only the people who
should be involved in the project
without the extra personnel
Disadvantages
Can lead to unhealthy competition
for more permanent leadership
Same people who want to always
lead
Enforce strict rotation of leaders
Depending on workload,
employees can be part of more
than one team
Enforce no more than 2 teams
(preferably only one) at any given
time
Typical functions of an organization
Operations and sourcing
Human resources
Accounting and finance (for large companies, they are separate
functions)
Sales
Marketing
R&D
Product development
IT
Organizational structure based on
business units
Business units can be
Vertical markets (examples: health care, aerospace, IT)
Type of customer (examples: corporate customers, consumers, small
businesses, government)
Product divisions (examples: specialty cookware, building products,
industrial metals)
Geography (examples: North America, Asia Pacific, Europe, Africa)
 Organizational structure based on
business units

CEO

North
America Asia Pacific Europe Africa

Human Accounting Product

Operations Resources Finance Marketing Sales R&D Development IT Functions Functions Functions
Matrix organizations
Is a combination between functional, regional or business units or
project base
Most people have
1 functional manager
1 regional / business unit manager / product
 Matrix organization
CEO

Corporate Managers

R&D
Human Accounting
Operations Sales Marketing Product IT
Resources Finance
Develop.

Business
Unit 1

Business
Unit 2

Business
Unit n
Culture
Combination of
Core values
Ceremony and rites
Stories and language
Commitment
Trust

Sets the tone for

How the company behaves with others (how it treats its employees,
vendors, partners, and shareholders)
How environmentally and socially responsible the company is
Zappos Core Values
Deliver WOW Through Service
Embrace and Drive Change
Create Fun and A Little Weirdness
Be Adventurous, Creative, and Open-Minded
Pursue Growth and Learning
Build Open and Honest Relationships With Communication
Build a Positive Team and Family Spirit
Do More With Less
Be Passionate and Determined
Be Humble
Role of Human Resources
To recruit and hire employees
To provide training and professional development for employees
To manage labor relations
To manage pay and benefits
To manage performance appraisal and feedback
To enforce labor laws
Offshoring and Outsourcing
Ensure that
Outsourced vendors comply with international labor laws
Short-term contractors have all the legal documentation
Right to work in USA
Tax identification,
Licenses if required
Remote or home office
Advantages Disadvantages
Saves the company money on Unsupervised employees can slack
office space and not perform the work as
promised
Provides flexibility to employees
(which can be a deal breaker for Sometimes, physical proximity may
some key employees) lead to quicker resolution and
execution
Allows the company to essentially
have multiple office around the
world

Doable and cost effective with

todays technology