2.12 Organisation Structure

Question 1

Organisational structure

Answer 1

the internal, formal framework of a business that shows the way in which management is organised + linked together + how authority is passed through the organisation

Question 2

Organisation chart

Answer 2

1. overall responsibility for decision making
2. formal relationship between different ppl & departments
3. chain of command
4. span of control
5. formal channels of communication both vertical and horizontal - aid investigation of communication probs
6. identity of the supervisor/ manager to whom each worker is answerable and should report to

Question 3

Chain of command

Answer 3

the way in which accountability and authority may be passed down the organisation

Question 4

Span of control

Answer 4

the no. of subordinate reporting to each more senior manager

Question 5

Level of hierarchy

Answer 5

A stage of the organisational structure at which the personnel on it have equal status and authority.

Question 6

The hierarchical (or bureaucratic) structure

Answer 6

organisational structure where there are fewer and fewer people on each higher level.

Question 7

Advantages of hierarchical structure

Answer 7

• Vertical divisions do not have to be based on functional departments (region/ country. product category)
• Career ladder for a keen and ambitious employee are illustrated by the different levels of hierarchy
• Role will be clear and well defined
• Clearly identifiable chain of command

Question 8

Disadvantages of hierarchical structure

Answer 8

• One-way (top downwards) communications
• Lack of coordination (few horizontal links)
• Managers with tunnel vision (not encourages to look at problems in other department)
• Inflexible

Question 9

Advs hierarchically narrow span of control

Answer 9

1. There is quicker communication between smaller teams
2. Feedback from subordinates should be more effective
3. Clearer (but longer) lines of communication between the different layers of management
4. Smaller teams are easier to control and manage
5. Greater specialisation and division of labour can help increase efficiency and productivity
6. There are greater opportunities to earn promotion - more levels exist in the hierarchy

Question 10

Advantages hierarchically wide span of control

Answer 10

1. Delegation becomes a relatively important part of managing an organisation - extra responsibilities for subordinates and, therefore, faster career development.
2. Communication may be improved (it should be faster) overall since there are fewer layers in the hierarchy.
3. It is cheaper to operate a wider span of control because there are fewer levels of management (management functions will be eliminated or delegated).
4. Smaller ‘psychological distance’ between those at the top and those at the bottom of an organisation - perhaps reducing an ‘us and them’ culture where workers feel alienated from senior management.

Question 11

Matrix Structure

Answer 11

an organisational structure that creates project teams that cut across traditional functional departments

• Task- or project- focused
• Gathers a team of specialists with the object of completing a task or project successfully
• Emphasis is placed on an individual’s ability to contribute to the team rather than their position in the hierarchy

Question 12

Advs of matrix structure

Answer 12

1. Allows total communication between all members of the team
2. Less chance of people focusing on just what is good for their department
3. Replaced with a feeling of what is good for the project and the business as a whole
4. More innovative and creative ideas as staff will be more motivated to contribute
5. Well designed to respond to changing markets or technological conditions

Question 13

Disadvs of matrix structure

Answer 13

1. less direct control for the top
2. passing down of authority to more junior staff could be difficult for some managers to come to terms with
3. reduce bureaucratic control -> resisted by some senior managers
4. Conflict

Question 14

Prob off tall/ narrow organisational structure

Answer 14

1. Slow communication with messages becoming distorted or filtered in some way
2. Narrow span of control
3. Greater sense of remoteness, among those on lower levels, from the decision-making power at the top.

Question 15

Delegation

Answer 15

Passing authority down the organisational hierarchy

Question 16

Advs of delegation

Answer 16

1. Gives senior managers more time to focus on important strategic roles
2. Shows trust in subordinates -> motivate & challenge them
3. Develops and trains staff for more senior positions
4. Helps staff to achieve fulfilment through their work (self-actualisation)

Question 17

Disadvs of delegation

Answer 17

1. If the task is not well defined or if inadequate training is given, then delegation is unlikely to succeed
2. Delegation will be unsuccessful if insufficient authority is given to the subordinate who is performing the tasks
3. managers may only delegate the boring jobs that they do not want to do -> not be motivating

Question 18

Centralisation

Answer 18

Keeping all of the important decision-making powers within head office or the centre of the organisation

Question 19

Decentralisation

Answer 19

decision-making powers are passed down the organisation to empower subordinates and regional/ product managers.

Question 20

Advs of centralisation

Answer 20

1. A fixed set of rules and procedures in all areas of the firm should lead to rapid decision making - there is little scope for discussion.
2. Business has consistent policies throughout the organisation. This prevents any conflicts between the divisions and avoids confusion in the minds of consumers.
3. Senior managers take decisions in the interest of the whole business - not just one division of it.
4. Central buying should allow for greater economies of scale
5. Senior managers at central office will be experienced decision makers

Question 21

Advs of decentralisation

Answer 21

1. More local decisions can be made that reflect different conditions (local knowledge and are likely to have closer contact with consumers)
2. More junior managers can develop and this prepares them for more challenging roles
3. Delegation and empowerment are made easier and these will have positive effects on motivation
4. Decision making in response to changes

Question 22

Factors influencing organisational structure

Answer 22

1. The size of the business and the number of employees.
2. The style of leadership and the culture of management (e.g., autocratic vs. democratic leadership styles).
3. Overhead costs - delayering will reduce management overheads.
4. Corporate objectives; e.g., overseas expansion will necessarily mean some decentralisation as management control is delegated to other locations.
5. New technologies, especially IT can facilitate the flow of information making some roles of middle management less important.

Question 23

Delayering

Answer 23

Removal of one or more of the levels of hierarchy from an organisational structure

Question 24

Advs of delayering

Answer 24

1. Reduces business costs
2. Shortens the chain of command -> improve communication
3. Increase spans of control and opportunities for delegation
4. Increase workforce motivation due to less remoteness from top management and greater chance of having more responsible work to perform

Question 25

Disadvs of delayering

Answer 25

1. Could be “one-off” costs of making managers redundant
2. Increased workloads for managers who remain -> overwork and stress
3. Fear that redundancies might be used to cut costs could reduce the sense of security of the whole workforce

Question 26

Line managers

Answer 26

Managers who have direct authority over people, decisions and resources within the hierarchy of an organisation

Question 27

Staff managers

Answer 27

Managers who, as specialists, provide support, information and assistanct to line managers.

Question 28

Informal organisation

Answer 28

The network of personal and social relations that develop between people within an organisation.