2.2 Organisational structure

Question 1

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

Answer 1

How businesses organise their human resources in various ways, but there is a need for a formal and organised structure as this helps a business function more efficiently.

Question 2

Accountability

Answer 2

shows who is held responsible for each particular job.

Question 3

Responsibility

Answer 3

shows who is in charge of whom and what role or capacity.

Question 4

Delegation

Answer 4

passing on of control and authority to others.

Question 5

Benefits + limitations of delegation

Answer 5

The manager saves time by not having to tackle every single task.
Motivate and develop employees who feel that they are trusted.

Poor delegation can cause confusion and a feeling in adequacy → demotivated staff → failure to achieve the tasks set.

Question 6

Span of control

Answer 6

the number of people who are directly accountable to a manager.

Question 7

Benefits + limitations of span of control

Answer 7

Fewer layers are needed in the hierarchy → cost control (fewer managerial positions)
Fewer subordinates → easier to communicate and control.
Smaller teams can be more productive

More levels of management → costly.

Question 8

Hierarchy

Answer 8

the organisational structure based on a ranking system.

Question 9

Line manager

Answer 9

the person directly above an employee on the next hierarchical level.

Question 10

Benefits + limitations of having a hierarchical structure

Answer 10

Clear lines of communication within the organisation → improved coordination and productivity.
Establish departments or teams to create a sense of belonging in the workplace → motivation.

Departmentalisation means workers are isolated to their official teams.
Inflexible → unresponsive to changes.

Question 11

Chain of command

Answer 11

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

Question 12

Delayering

Answer 12

process of removing one or more levels in the hierarchy to flatten the organisational structure.

Question 13

Benefits + limitations of delayering

Answer 13

Reduce costs
Improves the speed of communication
Encourages delegation and empowerment

Creates anxiety and a sense of security among workers who are worried about their jobs
Overloads staff
Delayed decision-making.

Question 14

Bureaucracy

Answer 14

the execution of tasks that are governed by office administrative and formal rules of an organisation.

Question 15

Characteristics of a centralised structure:

Answer 15

Decision-making is made by a very small number of people (senior management team).
Decisions are made without the consultation of other members.

Question 16

Benefits + limitations of centralisation

Answer 16

Rapid decision-making
Better control
Better sense of direction
Efficiency

Added pressure/stress for senior staff
Inflexibility
Possible delays in decision-making
Demotivating

Question 17

Characteristics of a decentralised structure:

Answer 17

Decision-making authority and responsibility is shared with others.

Question 18

Benefits + limitations of decentralisation

Answer 18

Input from the workforce
Speedier decision-making
Improved morale
Improved accountability 
Teamwork 

Costly 
Inefficiencies 
Greater chances of mistakes
Loss of control
Communication issues

Question 19

Factors that affect the decision of whether businesses ought to become more centralised or decentralised

Answer 19

The size of the organisation
The scale of importance of the decision 
The level of risk 
The corporate culture
Management attitudes and competencies 
The use of ICT

Question 20

An organisational chart

Answer 20

diagrammatic representation of a firm’s formal structure.

Question 21

Distinguish between tall and flat organisational charts

Answer 21

Tall organisational charts: many levels in the organisational hierarchy.
Flat organisational charts: fewer levels.

Question 22

Advantages of tall and flat organisational charts

Answer 22

Tall:
Quicker and more effective communication within smaller teams.
Easier to control smaller teams
Greater specialisation and division of labour
Greater opportunities for more people to be promoted

Flat:
Delegation is important 
Communication should be improved
Cheaper because fewer managers
Eliminate ‘them and us’ culture → workers do not feel alienated from senior management.

Question 23

Hierarchical organisational charts

Answer 23

A hierarchical structures is a traditional approach - subordinates must report to line manager.
The position of workers in the hierarchy indicates their rank, status and level of authority.
Bureaucratic - many levels in the hierarchy, with work processes formally regulated by rules and procedures.

Question 24

Project-based organisation

Answer 24

Human resources are organised around particular projects
Allows businesses increased flexibility to adjust quickly to adopt rapid innovations.
Each project is led by a project manager supported by a team of workers.

Question 25

Benefits + limitations of project-based organisations

Answer 25

Flexibility
Productivity
Efficiency
Motivational

Discontinuity
Isolation
Inefficiencies
Conflicting interests and priorities

Question 26

Matrix structure

Answer 26

A type of project-based organisation where amployees from different departments within an organisation temporarily working together on a particular object.

Question 27

Shamrock organisation:

Answer 27

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. It suggested that there are three groups of workers within an organisation:
Core staff
Peripheral workers
Outsourced workers

Question 28

Benefits + limitations of Shamrock organisations

Answer 28

Flexibility for an organisation
Easy to ‘hire and fire’

The core workers must be well paid and remunerated, while peripheral workers will suffer from a lack of job security. Outsourced workers are experts and therefore expensive.

Question 29

Communication

Answer 29

the transfer of information from one party to another.

Question 30

How can culture impact communication?

Answer 30

Language proficiency can have an impact on communication: different languages and accents
Cultural ignorance can cause offense to others

Question 31

How can ICT impact communication?

Answer 31

Emails: very fast method of communication, but set up costs can be high and data transmission via email is not always secure as it can be hacked into.
Mobile devices
Video conferencing