1.4.3 Organisational design

Question 1

organisational design/structure

Answer 1

creates a formal hierarchy that establishes who is accountable to whom throughout an organisation (people/management)

power
authority (power, relative importance, senior positions) (chain of command = communication)
importance
accountability (full responsibility)

shows: authority, responsibility, job titles/roles, accountability, how communication flows

Question 2

line manager

Answer 2

someone that has more authority of another

Question 3

span of control

Answer 3

number of people you line manage

no of employees for whom manager responsible for

Question 4

why is it necessary to have a structure as a business grows

Answer 4

1. aids efficiency
2. intrapreneurship
3. large volume of staff
4. harder to manage
5. helps ensure accountability = clarity
6. delegation
7. motivation = promotional prospects
8. aids decision making
9. well being/stress
10. communication requires structure (dis EOS)

Question 5

hierarchy

Answer 5

number of layers of management or supervision in organisation structure

Question 6

tall hierarchy

Answer 6

many layers of H
narrow span of control = better/longer communication/ more control closer supervision of employees (less delegation)
more opps for promotion
long chain of command
autocratic
centralised decision making (decision at top person at top = most experience) &quicker
often organised by function

expensive, less empowered, no freedom, stop intrapreneurship, less response to mkt changes

Question 7

flat hierarchy

Answer 7

fewer layers of hierarchy
wide span of control - empowered/freedom, reduced labour costs, creative, subordinates = chance for independence,= less direct control = delegation
democratic
shorter chain of command
decentralised decision making (located at most appropriate point, decisions made at most relevant point)
vertical communication improved
lower costs

communication difficult
stressed/overworked

Question 8

chain of command

Answer 8

lines of authority

Question 9

matrix structure

Answer 9

individuals work across teams and projects as well as within their own department/function

unclear lines of authority
2 line managers

Question 10

adv and dis of matrix structure

Answer 10

adv: motivation (team), lots of direction, expertise from all functions, morale/empowering, increase communication (barriers in departments), variety of skills. resources/ideas
dis: 2 managers (line), conflicts (prioritises functions Dis EOS), no promotional prospects (motivation/morale) = recruit, no clear line of accountability, difficult to coordinate

Question 11

delayering

Answer 11

removing layers of management from hierarchy of organisation
efficient = ownership and chain of command

Question 12

why delayer ?

Answer 12

save costs (staff high proportion of budget 85%) -> remuneration (payment system)
easier communication with subordinates
less direct impact on output = supervisory
too many managers = create bureaucracy
relies on subordinates empowered

Question 13

impacts of delayering

Answer 13

1. faster decision making
2. reduced no of hierarchy
3. lower labour costs
4. employee innovation (intrapreneurship)
5. team working & empowerment
6. wide span of control
7. shorter communication paths

Question 14

decision making

Answer 14

about authority, where should authority rest

locating at the most appropriate point

Question 15

centralised structure

Answer 15

keep decision making firmly at the top of hierarchy

• consistency/clarity = direction
• most expertise and more experience
• demonstrate leadership skills
• remunerate accordingly

Question 16

decentralised and why use it ?

Answer 16

decision making spread out to include more junior mangers in hierarchy

use it:

1. geographically separate - difficult to communicate (each location different culture/customs = poly centric and ethnocentric
2. encourage intrapreneurship = front facing staff = custom needs
3. reduce stress of CEO/managers
4. empower/trust
5. quicker decisions

Question 17

adv and dis of centralised/centralisation

Answer 17

adv:
easier to implement common policies/practices for whole business
prevent other parts of business being too independent
easier to co-ordinate/control from centre (e.g.budgets)
EOS and overhead savings
quicker decision making

dis:
still make hugely costly inaccurate decisions, out of touch
costly senior leadership role
staff feel dictated to
bureaucratic (extra layers in hierarchy)
local junior managers = likely to be much closer to customer needs
lack authority down hierarchy - decrease manager motivation
customer service = miss flexibility/speed of local decision making

Question 18

adv and dis of decentralised/decentralisation

Answer 18

adv:
decisions made closer to the customer
better able to respond to local circumstances
improved lvl of customer service
consistent aiming for flatter hierarchy
good way of training/develop junior management
improve staff motivation

dis:
lead to mistakes = costly to address (dis EOS =co-ordination and control)
could cause confusion
stress/under pressure
not “strategic” decision making
harder to ensure consent practices and policies at locations
Dis EOS (duplication of roles)
strong leadership in crisis
harder to achieve tight financial control (risk of cost overruns)