Page 205 - Introduction to Business

CHAPTER 5 Managing and Organizing Business 179

span of control and results in a relatively flat organizational structure. The partner’s
ability to monitor the activities of each of these dozen individuals daily is limited.
Wider spans of control often involve giving subordinates fairly broad autonomy.
Conversely, a manager with a narrow span of control will have relatively few
direct reports, and probably more ability to regularly monitor and interact with
these individuals. The CEO of a large corporation, for instance, may have only one
individual reporting directly to him or her, the company’s Chief Operating Officer
(COO). Narrow spans of control generally lead to taller, more pyramid-like organi-
zations. Different managerial spans of control may be appropriate for given organ-
izations at different times.
LINE,STAFF, AND COMMITTEE AUTHORITY. Organizing leads to different types of man-
agerial roles, with managers having different types of organizational authority. Line line authority The right to achieve
authority involves being a part of an organization’s direct chain of command and organizational goals by being part of
an organization’s direct chain of
having direct responsibility for achieving the goals of the organization. Kraft Foods
command
Corporation, for example, is one of the world’s largest food companies with over $34
billion a year in sales. It makes such well-known products as Jell-O, Kraft Macaroni
and Cheese, Ritz crackers, Maxwell House coffee, Oreo cookies, DiGiorno frozen piz-
zas, and Toblerone candies. Two clear line authority positions at Kraft Foods are cor-
porate group vice president, Kraft cheese, meals, and enhancers, and corporate
group vice president, biscuits, snacks, and confections. The first manager has over-
all responsibility and authority for the production of Kraft Macaroni and Cheese and
other products, while the second has overall responsibility and authority for the pro-
duction of Ritz crackers and other snacks. Both of the line departments supervised
by these line personnel are absolutely essential to the survival and growth of Kraft.
Kraft Foods also has numerous staff authority positions. Staff authority staff authority The right to provide
involves providing advice, support, and special expertise within an organization. advice, support, and special expertise
within an organization
Kraft, for instance, has a senior vice president and general counsel, and the attor-
ney holding this position has staff authority to provide advice to line personnel
throughout the company. The company’s senior vice president, human resources,
also plays an important staff authority role.
In some companies, especially those outside the United States like Toyota Motor
Corporation, there may be more of a team or committee authority approach.
Committee authority involves having committees or teams run the organization. committee authority The right of
A committee approach to running an organization may help bring a diversity of committees to run an organization
perspectives to problems, but may also be more time consuming than traditional
organizational authority approaches.
It is not unusual for there to be some tension between and among individuals
in different types of authority roles. In particular, individuals in staff versus line
authority positions are not infrequently at odds. Staff personnel such as attorneys,
human resources professionals, and ethics officers are often in internal compli-
ance-type roles where they are telling line personnel not to do things like pay bribes
to foreign officials, discriminate against disabled individuals, and so forth. Line
personnel sometimes feel that staffers in their ivory towers don’t understand the
real world of business and what it’s like to be in the trenches. That is, it may be nec-
essary to pay some bribes in order to sell Oreo cookies in a certain foreign country,
and by the way, selling Oreo cookies is the way the company pays for everything.
Virtually all organizations have both line and staff authority positions. For
example, in the regional hospital illustrated in Exhibit 5.3, all the positions shown
are line positions except the general counsel, which is a staff position.
reality In situations where you’ve managed things, do you generally like to
CH ECK delegate authority or keep strong centralized control?

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