2.2 Organizational Structure

Question 1

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

Answer 1

The organisational structure
determines how tasks are divided
and coordinated, who employees
report to, who has the authority to
define tasks to employees and
what the role of each employee is
in the organisation.

Question 2

Types of Organisational Structures

Answer 2

Flat/horizoontal Structure

Tall/vertical Structure

Organizational Structure by Product

Organizational Structure by Product

Organizational Structure by Region

Question 3

Factors
influencing
organizational
structure

Answer 3

The size and the number of employees of the business

The leadership style and management culture of the organization

Corporate objectives

New technologies

Question 4

Centralization and decentralization

Answer 4

Centralization is keeping all of the important decision making powers within head office or the center of the organization.

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

Question 5

Delegation and adv. and disadvantages

Answer 5

The process involves managers deciding which work they should do themselves and which work should be delegated to others for completion.

Advantages:
Empowers employees to make decisions

Builds skills and motivates employees

The manager will have free time for higher-priority tasks.

Disadvantages:
Employees may feel frustrated if they are unwilling to take more responsibility

Tasks may be reptitive and tedious

Employees get tired of handling less pay

Question 6

Delayering and advantages and disadvantages

Answer 6

Delayering involves removing a layer of management.

Advantages:
Fewer managers are needed, which allows cost reduction.

The organization becomes less bureaucratic.

Decisions can be made faster.

Encourages innovation.

Disadvantages:
People will have to take new responsibilities and time will be needed for adjustment.

Increased span of control, which can increase the workload of managers.

Can have negative impact on motivation if there were job cuts in the process.

Not all companies are suited for organisational structures with few levels of hierarchy.

Question 7

Bureaucratic Theory

Answer 7

Bureaucracy is a system of administration with clear hierarchical structure in which people are expected to follow precisely defined rules and procedures. It is used to describe the formal rules in an organisation, the communication and impersonal relationships

Question 8

Communication

Answer 8

Communication is the
transferring of a message from
the sender to the receiver, who
understands the message.

Question 9

Advantages of two-way communication

Answer 9

● It confirms that the receiver actually received the message
● Makes sure the receiver understood or acted upon the message
● Being part of the communication process, the receiver feels more a
part of this process and can contribute to the discussion
● It creates a more democratic environment where people can share
thoughts, ideas, opinions.
● It helps creating better relations throughout the company

Question 10

Benefits of effective communication to businesses

Answer 10

Coordination between different parts of the business improves

This improves efficiency because fewer resources are wasted

Enables faster decision making

Reduces the number of mistakes employees make

As the business is able to react to the market faster, they become more competitive

Employees are kept informed about decisions that are made or changes that are happening

Customer service improves

Market share increases

Employee motivation improves