2.2 Organisation structure

Question 1

1. What is meant by organisational structure and what is its purpose?

Answer 1

Organisational structure is the way that a business organises their human resources, which helps the business function more efficiently due to accountability and responsibility.

Question 2

2. What is the difference between accountability and responsibility?

Answer 2

• accountability: who is held responsible for each particular job
• responsibility: shows who is in charge of whom and in what role/capacity

Question 3

3. What is delegation and how does it relate to the span of control?

Answer 3

Delegation: the passing on of control and authority to others - involves the line manager entrusting and empowering staff to complete a task or project but holding them accountable for their actions.
Span of control: the number of people who are directly accountable to a manager

Question 4

4. Distinguish between a wide and narrow span of control.

Answer 4

Wide - fewer layers in the hierarchy, which helps with cost control as there are less managerial positions in the firm; communication is more effective
Narrow - fewer subordinates who are accountable to a manger; more productive; tend to suffer from communication problems because there are more levels; more costly.

Question 5

5. Explain the difference between flat and tall hierarchical structures.

Answer 5

Tall hierarchical structures have more levels -> longer communication lines and chains of command, narrower span of control

Question 6

6. What is the chain of command?

Answer 6

Chain of command: the formal line of authority through which orders are passed down in an organisation.

Question 7

7. Distinguish between centralised and decentralised structures.

Answer 7

Centralised structures: decision-making is made by a small number of people - decisions are made through the person(s) in the centre without consultation with other members of the organisation.
Rapid decision-making
Better control
Better sense of direction
Efficiency
Added pressure/stress for senior staff
Inflexibility
Possible lays in decision-making
Demotivating
Decentralised structures: decision-making authority and responsibility is shared with others.

Question 8

8. What is bureaucracy?

Answer 8

Bureaucracy: the execution of tasks that are governed by official administrative and formal rules of an organisation i.e. prescribed rules and policies, standardised procedures and formal hierarchical structures.

Question 9

9. What is an organisational chart?

Answer 9

Organisational chart: a diagrammatic representation of a firm’s formal structure.

Question 10

10. Differentiate between organisation by product, function and region.

Answer 10

Organisation by product: structure human resources by the various types of products
Organisation by function: different operational roles within a business i.e. Marketing, Production, Finance and HR
Organisation by region: by geographical region - allows the business to be more aware of and responsive to local cultural differences and consumer needs.

Question 11

11. What is project-based organisation?

Answer 11

Popular in construction, software engineering, entertainment, aerospace and oil exploration.
Allow businesses increased flexibility to adjust quickly to market changes
Each project is led by a project manager supported by a team of workers
+ Flexible
+ Productive
+ Efficient
+ Motivational
- Discontinuity
- Isolation
- Inefficiencies - every project needs its own finances, experts, resources
- Conflicting interests and priorities

Question 12

12. Explain how Charles Handy’s Shamrock organisation changes traditional organisational structures.

Answer 12

Shamrock organisation: Charles Handy’s model that organisations are increasingly made up of core staff who are supported by peripheral workers, consultants and outsourced staff and contractors.

Question 13

13. In the context of human resources, what is meant by communication?

Answer 13

Communication is the transfer of information from one party to another. Managers spend a significant part of their time communicating with both internal and external stakeholders.

Question 14

14. Outline how cultural differences have an impact on communication in an organisation.

Answer 14

Cultural differences can impact on communication in an organisation:
Accents: hinder communications and cause messages to be misinterpreted or misunderstood.
Language proficiency is highly valued communication skill in today’s competitive labour market.

Question 15

15. How have innovations in technology impacted on communication in business.

Answer 15

Email: using computer wide area networks (WAN) as a mailing system.
Mobile devices: used by managers and employees who are ‘on the go.’
Video conferencing