2.2 - Organisational Structure

Question 1

organisational structure definition

Answer 1

the systems of relationships between the individuals of an organisation

Question 2

types of organisational structures

Answer 2

• tall (vertical)
• flat (horizontal)

Question 3

levels of heirarchy definition

Answer 3

the number of levels within an organisation
* employees at the same level have the same responsbilities and authority
* tall - many levels of heirarchy
* flat - few levels of heirarchy

Question 4

span of control definition

Answer 4

the number of employees that a manager directly oversees
* tall - low span of control
* flat - high span of control

Question 5

chain of command definition

Answer 5

the route that information and responsibilities move up and down the organisational structure of the business
* tall - long chain of command
* flat - short chain of command

Question 6

pros of tall (vertical) organisational structure

Answer 6

• smaller teams - easier to control and manage
• smaller teams creates higher levels of motivation
• employees have many chances of promotion (motivating)
• clear heirarchy of structure

Question 7

pros of flat (horizontal) organisational structure

Answer 7

• employees may feel more empowered because they feel like they are closer to the top of the heirarchy
• less managers required - lower management costs
• quicker communication and decision making - short chain of command
• more delegation of responsibility - fosters an environment of high trust

Question 8

delegation definition

Answer 8

• passing on authority or responsibility of a task to an employee
• (usually passed from a higher level to a lower level in the heirarchy)

Question 9

pros/cons of delegation

Answer 9

pros
* improves the motivation for lower-level employees
* increases the speed and quality of decision making
* reduces workload for senior and middle managers
* may lead to improved junior employee skill

cons
* cost of training
* may be innapropriate for authoritarian leadership style
* not suitable for managing a crisis

Question 10

bureaucracy definition

Answer 10

a system under which an organisation uses complex rules and procedures, which may slow the functioning of the business which may reduce its efficiency

Question 11

what is delayering within a business

Answer 11

when a business removes levels of its heirarchy in the organisational struture
(makes organisation flatter)

Question 12

pros/cons of delayering

Answer 12

pros
* less salaries to pay
* quicker communication
* empowers lower standing employees

cons
* reduced chance for promotion
* damage brand image/motivation
* fewer chances for promotion
* greater workload for employees
* redundancy costs for managers unneeded

Question 13

centralization definition

Answer 13

When a business’ key decisions are made in headquarters (HQ) - or at the center of the business

Question 14

pros/cons of centralization

Answer 14

pros
* easier communication - quick and easy decision making
* more standardisation and control of brand

cons
* may not have good understanding of other markets - standardised (lack of flexibility)
* employees may be demotivated - further away from center where decisions are made
* employees at headquarters have all the pressure - making decisions for the whole business

Question 15

decentralized decision making definition

Answer 15

when the main decisions of a businesness are passed down to middle or junior level managers within the business or other countries

Question 16

pros/cons of decentralized decision making

Answer 16

pros
* decisions can be more tailored to the local culture
* empowers individual departments of the business (improves teamwork and morale)

cons
Decisions more tailored to the local culture
Empower other parts of the business
Improved morale and teamwork

Question 17

what is an organisational chart?

Answer 17

a diagram showing the internal structure of a business

Question 18

what are the different types of organisational charts?

Answer 18

• organisation by function
• organising based on products
• organising based on region
• matrix structure
• based on projects
• Handy’s Shamrock

Question 19

what is organisation based on function?
what are its pros and cons?

Answer 19

when a business is organised by department - employees that perform similar tasks are grouped together

pros
* employees can become specialised and efficient at one task

cons
* managers may only consider their function within the business - neglecting overall running of business

Question 20

what is organisation based on products?
what are its pros and cons?

Answer 20

when a business is organised by different products in its product portfolio

pros
* departments can specialise on only one product

cons
* may lead to a lack of coordination within different compartments - may lead to diseconomies of scale

Question 21

what is organising a business based on region?
what are its pros and cons?

Answer 21

when a business is organised by the geographical location in which is operates

pros
* similar cultures within the department - communication is similar and efficient

cons
* departments may not communicate thier plans - diseconomies of scale
* lack of consistency across different areas - different customer perceptions

Question 22

what is organising using the matrix structure?
what are its pros and cons?

Answer 22

orgnising a business into teams based on individual with suitable skills to respond to and supply customers needs

pros
* focuses on the tasks that are necessary for the success of a business
* encourages flexibility and ability to respond to the needs of customers
* motivation and development for employees by supplying varied and challenging tasks

cons
* may create confusion + conflict if teams are not well defined
* employees may have divided responsibilities
* heavy expenditure on support staff may be required

Question 23

organising a business based on products definition?
what are its pros and cons?

Answer 23

organising of a business by project (a temporary objective which a business persues)
pros
* encourages creativity and innovation
* employees have the opportunity to develop new skills
* allows resources to be allocated in places where they will operate most effectively
* skills development

cons
* employee isolation (lack of belonging or company culture)
* limited communication between teams
* narrow skill use (employees hired for just one skill - may not grow)
* divided loyalties (lead to confusion, stress, conflicting priorities)

Question 24

what is Handy’s Shamrock Organisational structure

Answer 24

when the business is divided into three main sections
* core workers (full time employees; teachers)
* temporary workforce (part time - per job or per hour; substitute teachers)
* subcontractor (outsourced employees -> external; building company for renovations)

Question 25

what must you consider when deciding what organisational structure to use?

Answer 25

changes in the external environmnet (external factors) eg. * changes in technology * changes in competition * economic changes