Organizational structure and culture shape the attitudes, behaviors, and performance of employees and groups in a company. A well-designed organizational structure can help facilitate a culture that makes managing employees and teams easier and gives the company a competitive advantage. This chapter has made the following major points:

1. The challenge facing managers of all companies is to design an organizational structure and culture that (1) motivates employees to work hard and to develop supportive work behaviors and attitudes and (2) coordinates the actions of employees and groups to ensure they work together so that (3) a company can pursue its business model successfully.
2. Organizational design is the process of creating an organizational structure and culture so that a company can pursue it business model profitably.
3. Organizational structure is the framework of task-and-authority relationships in a company that coordinates and motivates employees to work together toward a common goal.
4. Organizational culture is the set of shared company values and norms that shape the way employees interact with one another.
5. The two main decisions involved in designing organizational structure are (1) how to group a company's employees and resources into functions and divisions and (2) how to link and coordinate these functions and divisions. How well managers make these decisions determines how efficiently and effectively a company operates.
6. Most companies first choose to divide up their activities by function. This involves creating a functional structure that groups people together by virtue of their expertise or tasks, (generally by department).
7. A functional structure can become a disadvantage (a) when a company starts to produce a wide range of different kinds of products, (b) when it begins to serve many types of customers, each of which has a different set of needs, (c) when its operations expand geographically by region or by country.
8. To solve these problems, companies sometimes overlay their functional groups with divisional groups. Companies can choose from three kinds of divisional structures: product, market, and geographic.
9. When the competitive environment is changing rapidly, managers often choose a matrix structure. A matrix structure groups employees by function and by product and is very flexible.
10. Generally, the more complex a structure a company has relative to its size, the more problems it will experience coordinating its different functions and divisions. Many firms have therefore moved to flatter organizational structures.
11. Three methods of achieving coordination include (1) allocating and decentralizing authority by empowering employees and creating self-managed teams (2) specifying work rules and SOPs and (3) linking functions and divisions via direct contact, liaison roles, task forces, and cross-functional teams.
12. A company's culture is a product of its specific values and norms.
13. Four important sources of organizational culture are the values of the founder of a company, the process of socialization, ceremonies and rights, and stories and values.
14. Strong company cultures are those with values and norms that motivate employees to work hard and help a company succeed. These cultures link rewards directly to the employee's performance and to the performance of the company and emphasize entrepreneurship at all levels.