1.4.3 Organisational Design

Question 1

Organisation design is

Answer 1

•Organisational design is the framework that provides a business with a structure to achieve its objectives

Question 2

Organisational structure is

Answer 2

Organisational structure is the way in which the workforce within a firm is organised, including job roles and communication flows

Question 3

Organisational charts show

Answer 3

Organisational charts provide a visual representation of the organisational structure

Question 4

Hierarchy is the

Answer 4

•Hierarchy is the structure of the workforce within an organisation showing who is accountable to whom

Question 5

How do the two levels of the hierarchy differ

Answer 5

• The levels of hierarchy within firms will differ:
• tall and thin structures occur where each superior is responsible for a few subordinates
• this allows for closer supervision and communication between the two levels
• wide and flat means that each superior is responsible for a large number of subordinates
• this requires greater delegation but fewer levels allowing for quicker communication through the firm

Question 6

Define and explain the chain of command

Answer 6

• Chain of command is the way authority and power is passed down the levels of hierarchy
• The chain of command will be from the top of the organisation structure downwards
• The longer the chain of command the slower communication and potentially decision making
• It is however important that communication can flow in both directions

Question 7

What is span of control

Answer 7

The span of control shows the number of subordinates that a manager or supervisor is directly responsible for

Question 8

Define wide span of control

Answer 8

If a manager has many subordinates

Question 9

Define narrow span of control

Answer 9

If they have few subordinates

Question 10

Define authority

Answer 10

Authority is the power of an employee to instruct subordinates, make decisions and control the use of resources

Question 11

What are the two types of authority

Answer 11

Centralised

Decentralised

Question 12

Define centralised

Answer 12

Maintained by a few at the centre of the organisation

●Centralisation is when the responsibility for decision making is maintained, by a limited number of senior managers, at the top of the hierarchy
●Few decision makers
●Decisions are made by those at the top of the hierarchy
●Speeds up decision making
●Maintains tight control
●Bureaucratic

Question 13

Define decentralised

Answer 13

Spread across the organisation

●Decentralisation is when the responsibility for decision making is delegated to a number of middle managers throughout the hierarchy
●Delegates decision making
●Decisions made at many levels within the hierarchy
●Frees up management time
●Provides motivation
●Reduces bureaucracy

Question 14

What is a matrix structure

Answer 14

Is one where teams are put together from different functional areas to work on specific projects

Question 15

Advantages of a matrix structure

Answer 15

●Communication across functional areas
●Range of view points considered
●Functions support and understand each other
●Motivational

Question 16

Disadvantages of a matured structure

Answer 16

●Potential loss of control
●Dependent upon effective delegation
●Teams may take time to work together effectively
●Can cause conflict

Question 17

Impact on efficiency and motivation

Answer 17

• Speed of decision making
• Flow of communication
• Degree of supervision
• Opportunities for promotion
• Cross functional relationships
• Clarity of roles
• Employee motivation