2.2 - Organizational Structure

Question 1

Accountability

Answer 1

Accountability describes the extent to which a person is held
responsible for the success or failure of a task or job. It allows senior managers to have better control over the running of their
organizations.

Question 2

Bureaucracy

Answer 2

Bureaucracy is the official administrative and formal rules of an organization that govern business activity. It involves prescribed rules and policies, standardized procedures and formal hierarchical structures.

Question 3

Centralization

Answer 3

Centralization occurs when the majority of decision making is done by a very small number of people (usually the senior
leadership team) who hold decision-making authority and responsibility.

Question 4

Chain of command

Answer 4

Chain of command refers to the formal line of authority, shown in an organization chart, through which formal communications and orders are passed down.

Question 5

Decentralization

Answer 5

Decentralization occurs when decision making authority and
responsibility are shared with others in the organization.

Question 6

Delayering

Answer 6

Delayering is the process of removing levels in the hierarchy to flatten the organizational structure, thereby widening the span
of control in the hierarchy.

Question 7

Delegation

Answer 7

Delegation is the empowerment of a person lower down in the
organizational structure by passing on control and decision-making authority to complete a certain task or role.

Question 8

Flat / Horizontal organizational structure

Answer 8

A flat (or horizontal) organizational structure means that there are only a few layers in the formal hierarchy and hence managers have a relatively wide span of control.

Question 9

Hierarchy

Answer 9

The hierarchy in a business refers to the organizational
structure based on a ranking system. Each hierarchical level refers to a different rank with its associated degree of authority and responsibility.

Question 10

Levels of the hierarchy

Answer 10

Levels of the hierarchy refer to the number of layers of formal
authority in an
organization. The number of levels is shown in
an organization chart.

Question 11

Line manager

Answer 11

Line manager refers to the person directly above an employee in the organizational structure.

Question 12

Managers

Answer 12

Managers are the people responsible for the day-to-day running of the business or a department within the organization.

Question 13

Matrix structure

Answer 13

A matrix structure refers to a flexible type of organizational
structure of representatives from different departments,
temporarily working together on a particular project or job.

Question 14

Organization by function

Answer 14

Organization by function refers to structuring a workforce according to business functions, i.e. specialized roles or tasks such as marketing or finance and accounts.

Question 15

Organization by product

Answer 15

Organization by product refers to structuring a workforce according to the goods or services produced or sold. Each department focuses on a different product within the
organization’s overall product portfolio.

Question 16

Organization by region

Answer 16

Organization by region refers to structuring a workforce according to different geographical areas, based on where the
firm’s operations are.

Question 17

Organization chart

Answer 17

Organization chart is a diagrammatic representation of a firm’s
formal structure of human resources.

Question 18

Organizational structure

Answer 18

Organizational structure refers to the formal interrelationships
and hierarchical arrangements of human resources within a
business.

Question 19

Outsourced workers

Answer 19

Outsourced workers, in Charles Handy’s Shamrock
Organization, are the individuals or organizations hired on a
contract basis to carry out specific but non-core roles.

Question 20

Peripheral workers

Answer 20

Peripheral workers, according to Charles Handy, are the
contingent workers consisting of part-time and temporary staff
hired by the organization to provide greater flexibility.

Question 21

Professional core

Answer 21

Professional core, according to Charles Handy, are the core
workers consisting of full-time specialists (professionals) who
are vital for the organization’s operations and survival.

Question 22

Project-based organization

Answer 22

A project-based organization arranges human resources
around particular projects, each led by a project manager. Such structures allow increased flexibility to adjust quickly to market changes and to adopt rapid innovations.

Question 23

Responsibility

Answer 23

Responsibility refers to who is in charge of whom and in what role or capacity. Roles and responsibilities can be seen in an organization chart.

Question 24

Shamrock organization

Answer 24

The Shamrock Organization refers to Charles Handy’s model that organizations are increasingly made up of core staff who are supported by peripheral workers and outsourced workers (consisting of consultants and contractors).

Question 25

Span of control

Answer 25

Span of control refers to the number of subordinates overseen
by a manager, i.e. the number of people who are directly accountable to the manager.

Question 26

Tall / Vertical organization structure

Answer 26

A tall (or vertical) organization structure means that there
are many layers in the hierarchy and hence managers have a
narrow span of control.