3: Org and Business Structures

Question 1

What are the 4 levels of management?

Answer 1

Top management

Middle management

First line management

Direct operational staff

Question 2

What are the six blocks of Mintzberg’s building blocks?

Answer 2

From top down:

Ideology
Strategic apex
Middle line
Operating core

Sides:

Technostructure
Support staff

Question 3

What are the coordinating mechanisms for Mintzberg?

Answer 3

Direct supervision

Standardisation

Mutual adjustment

Question 4

Principles of organisation structure?

Answer 4

Division of work
Scalar chain
Correspondence of authority and responsibility
Centralisation
Unity of command
Unity of direction

Multiskilling
Flexibility

Question 5

Ways of communicating organisational structure?

Answer 5

Charts
Manuals
JDs

Question 6

What are the 5 kind of Mintzberg structure?

Answer 6

1. Entrepreneurial structure
2. Functional structure
3. Divisional structure
4. Matrix structure

Also professional bureaucracy?

Question 7

Describe an entrepreneurial structure

Answer 7

Built around an owner-managed

Totally centralised, all key decisions being made by a strategic leader

Plus:
- fast decision making
- more responsive to market
- good control
- close bond to workforce

Negative
- lack of career structure
- too centralised
- cant cope with diversification/growth

Question 8

Describe functional structure

Answer 8

Outgrown entrepreneurial structure
Functional basis

Board of directions > managers of departments

Small companies with few products and locations, in a stable enviro

Plus:
- economies of scale
- standardisation
- specialists more comfortable

Negative:
- empire building
- slow to adapt
- conflict between functions
- cannot cope with diversification

Question 9

Describe a divisional strcture

Answer 9

In accordance with product/lines or geographical locations

Board of directors > divisions, ie. Chemical, plastics

Own managers looking after own resources. Large scale productions

Plus:
- enables product growth
- clear responsibility
- training of general managers

Negative:
- loss of control
- lack of goal congruence
- duplication
- specialists may feel isolated

Question 10

Describe matrix structure

Answer 10

Has benefits of divisional and functional structure

Found in multi product and multi functional orgs

Plus:
- flexibility
- advantages of both structures

Negatives:
- dual command
- dilution of functional authority
- time consuming meetings

Question 11

What are the pros of decentralisation?

Answer 11

Senior management can concentrate on strategy

Better local decisions due to local expertise

Better motivation

Quicker responses/flexibility

Training/career path

Question 12

What are the cons of decentralisation?

Answer 12

Loss of control by senior management

Dysfunctional decisions due to a lack of goal congruence

Poor decisions made by inexperienced manager

Extra costs re: information

Question 13

What are the characteristics of a tall structure?

Answer 13

Many managerial levels

Narrow span of control

More promotional oppurtunities

Smoother progression from one level to another

Inhibits delegation

More expensive

Question 14

What are the characteristics of a flat structure?

Answer 14

Fewer managerial levels

Wide span of control

Quicker decision making

Lower management costs

More delegation

People may be overworked

Question 15

Burns and Stalker two extremes of structure:

Answer 15

Mechanistic
- rigid and formalised
- focuses on efficiency
- power based on authority

Organic
- fluid and flexible
- informal
- power based on expertise

Question 16

Advantages and disadvantages of sole traders?

Answer 16

Plus:
Keep all profits
Little regulation

Negative:
unlimited liability
continuity concerns

Question 17

Advantages and disadvantages of a partnership?

Answer 17

Plus:
- combined skills
- little regulation

Negatives:
- unlimited liability
- potential disagreements

Question 18

Advantages and disadvantages to limited companies?

Answer 18

Plus:
- limited liability
- ownership transferred by selling shares

Negatives:
- regulation
- financial statements open to scrutiny

Question 19

What are the 4 kind of alliances?

Answer 19

Joint ventures
- a separate joint owned-company

Licensing/franchising
- one company manufactures/markets that of another

Strategic alliance
- ‘loose’ collaboration (like airways)

Agency agreements
- one party distributes another

Question 20

What is a business group?

Answer 20

A number of companies under common control

Parent company

Owns sufficient number of shares to exercise control

Over the subsidiary

Question 21

What does an organisational chart include?

Answer 21

The span of control

The scalar chain

Question 22

What is a professional bureaucracy?

Answer 22

Simple systems about the standardisation of skills

All training schools, etc, where a profession is taught

Question 23

Another word for function structure?

Answer 23

Machine bureaucracy

The technostructure exerts a pull towards a standardisation process

Question 24

Another word for matrix structure?

Answer 24

Adhocracy/innovative

Any company with both senior managers and project managers will have this

Question 25

The key building block of divisional structures?

Answer 25

The middle line

Question 26

What does a technostructure do?

Answer 26

Standardises work processes

Question 27

What do wide flat organisations exhibit?

Answer 27

Greater need to delegate

Better communication

Large spans of control

Can afford less tight control of the team

Question 28

What do limited companies always have?

Answer 28

Perpetual succession

Separate legal personality

Regulated under CA2006

Unlimited company’s liability

Question 29

Advantages of centralisation?

Answer 29

Greater levels of functional coordination

Greater potential for cost savings