2.2 - Organisational structure

Question 1

Levels of hierarchy

Answer 1

How many levels of responsibility are in a business. Each level indicates a level of seniority in the business.

Question 2

Line managers

Answer 2

People who have the authority to make decisions and who bear responsibly for the outcomes of those decisions

Question 3

Staff manager

Answer 3

Someone with the authority to communicate a decision made by the CEO without the responsibility for that decision

Question 4

Chain of command

Answer 4

Traditionally, decisions travel from the top of the organisation downwards and are therefore often referred t was commands.

Question 5

Span of control

Answer 5

Refers to how many subordinates are directly under the authority of a manger and whom managers are responsible for.

Question 6

Delegation - What it is and span of control

Answer 6

Occurs when a manager gives authority for a particular decision but not the responsibility for the outcome of that decision.

More likely the note span of control is wide.

A narrow span of control will keep a tighter control on all decisions

Question 7

Centralisation - What it is, level of hierarchy, delegation and type of leadership

Answer 7

A high degree of centralisation indicates the tall major decision making is maintained within a small group of managers operating close to the head of the business

Usually with businesses that have many levels of hierarchy and narrow spans of control

Delegation rarely happens and leadership is usually autocratic

Question 8

Decentralisation - What it is, level of hierarchy, delegation and type of leadership

Answer 8

Senior managers may maintain core strategic decisions, but other decision making authority is delegated to middle managers.

Usually with businesses that have fewer levels of hierarchy and wider spans of control

Delegation is more likely to happen and leadership is likely to be democratic

Question 9

Bureaucracy - What it is, delegation and levels of hierarchy

Answer 9

Any administrative system. An organisation with many rules and procedure and set ways of doing things.

Personal initiative, flexible thinking and delegation are not expected

Expected to have many levels of hierarchy

Question 10

De-layering

Answer 10

Occurs when a business reduces the levels of hierarchy by removing layers of management.

Used to reduce bureaucracy and increase the decision making capability of middle managers.

Reduces costs

Question 11

Tall organisational structure

Answer 11

Many levels of hierarchy

Narrow spans of control

centralised decision making

long chains of command

Autocratic leadership

Limited delegation

Question 12

Flat organisational structure

Answer 12

Few levels of hierarchy

Wider spans of control

Decentralised decision making

Shorter chains of command

Democratic leadership

Increased delegation

Question 13

4 types of ways organisational structures can be presented

Answer 13

Hierarchy

Function

Product

Region

Question 14

Project based organisation

Answer 14

Designed to be more flexible and responsive to market demands

Project managers run teams of employees focusing on individual projects

Team splits and reassembles when project complete

No interaction between team projects

Common in construction

Question 15

Shamrock organisations

Answer 15

3 main groups of staff

Core staff (full time) eg: Managers, technicians
Must be well compensated and have job security
E-commerce and teleworking have reduced core staff – implies downsizing

Peripheral workers (part time, contractual)
Employed only when required
Less job security and morale but offer more flexibility

Outsourced workers (subcontracting)
Paid to do specialized tasks

Question 16

Advantages of delayering

Answer 16

Reduce costs

Improve speed of communication

Encourage delegation

Increases motivation - less remoteness form management and more likely for more responsibility

Question 17

Disadvantages of delayering

Answer 17

Can cause job insecurity, demotion, redundancy

Overstretching of employees

Costs to train employees

Question 18

Advantages of bureaucracy

Answer 18

Authority and levels of responsibility are obvious

Standardisation of processes to ensure efficiency

Turns employees into specialists rather than generalists

Loyalty to department

Question 19

Disadvantages of bureaucracy

Answer 19

May stifle creativity

Rivalries between departments may ensue

Less job satisfaction; high labor turnover

Slow decision-making process

Salaries for the different layers of management increases costs

Red tape

Question 20

Advantages of centralisation

Answer 20

Rapid decision making on single projects

Better control over all company activity

Better sense of direction

Suited for smaller businesses

Decisions are more consistent

Question 21

Disadvantages of centralisation

Answer 21

Slow decision making on multiple projects

Stress for senior staff

Inflexible

Demotivating

Exclusion of other people’s ideas that may be better

Question 22

Advantages of decentralisation

Answer 22

Input from employees

Speedier decision making

Improved Morale

Accountability

Teamwork

Question 23

Disadvantages of decentralisation

Answer 23

No control

Greater chance of mistakes

Reliance on communication

Redundancy

Lower standards of work (no governing body)

Inconsistency between company goals (regional managers)

Question 24

Factors affecting decision to have a centralised or decentralised structure

Answer 24

Size of organisation

Scale of importance of decision

Level of risk

Corporate culture

Management attitude and competencies

ICT

Question 25

Delegation Checklist (SMARTER)

Answer 25

Specific – tasks clearly defined

Measurable – quantifiable results

Agree – on amount of power and freedom

Realistic – depends on the ability to carry out the task

Time Bound – task completion

Ethical – tasks fairly delegated

Recorded – documented

Question 26

Effectiveness of communication depends on:

Answer 26

Clarity of the message

Medium used (ie. e-mail, telephone, letter, face to face)

Ability of receiver to decode message

Question 27

How can cultural differences affect communication?

Answer 27

Preference for oral communication, use of body language, directness of language used

Informal/unofficial communication channels may also emerge

Question 28

How can formal verbal communication occur?

Answer 28

Interviews

Meetings

Lectures

Presentations

Telephone converstations

Question 29

How can informal verbal communication occur?

Answer 29

Face to face conversations

Gossiping

Telephone converstations

Question 30

Advantages of verbal communication

Answer 30

Quick, direct and effective

Immediate feedback

Question 31

Disadvantages of verbal communication

Answer 31

Message can be misunderstood if sender uses:

Wrong language, does not speak clearly, does not allow for feedback

Question 32

Advantages of visual communication

Answer 32

Permanent, recognisable, immediate

Question 33

Disadvantages of visual communication

Answer 33

Difficult for people with limited signs or communication is not positioned appropriately

Demands interpretation, different cultures will interpret differently

Question 34

Advantages of written communication

Answer 34

Kept

Amended

Revised

Question 35

Disadvantages of written communication

Answer 35

Considered impersonal

Tone can be lost

Not immediate

Question 36

Main problems of tall organisational structure

Answer 36

Communication through the organisation can become slow wit messages becoming distorted

Spans of control are likely to be narrow

There is likely to be a greater sense of remoteness for lower levels

Question 37

Advantages of delegation

Answer 37

Gives senior managers more time to focus on important strategic roles

Shows trust in subordinates, motivates them

Trains staff for more senior positions

Helps staff to achieve fulfilment through their work

Encourages staff to be accountable for their work based activities

Question 38

Disadvantages of delegation

Answer 38

If task is not well defined or not enough training, task is not likely to be done

Delegation will be unsuccessful if insufficient authority is given to the subordinate who is performing the tasks

Managers may only delegate the boring jobs - not motivating

Question 39

Advantages of matrix structure

Answer 39

Allows total communication between all members of the team

Less chance of people focusing on just what is good for their department

Different specialist knowledge - more successful knowledge

Can be created quickly

Question 40

Disadvantages of matrix structure

Answer 40

Less direct control from the top

Team members can get 2 leaders

Question 41

Advantage of effective communication

Answer 41

Employee motivation and labour productivity

The number and quality of ideas generated by the workforce

Speed of decision making

Speed of response to market changes

Reduces the risk of errors

Effective coordination between departments

Question 42

Disadvantages of electronic media

Answer 42

Require staff to be trained

Reduce social contact and create a sense of isolation

Security issues

Information overload