3: Organisational and business structures

Question 1

What is the order of management hierarchy?

First-line management, Middle management, Top management, Direct operation staff

Answer 1

Top management
Middle management
First line management
Direct operation staff

Question 2

“Manage operational parts of the business” - which level of management is this?

Top management, middle management, first-line management or direct operation staff?

Answer 2

First line management

Question 3

Which three are basic principles of an organisation structure?

Scalar chain
Centralisation
Unity of command
Unity of equity
Unity of direction
Division of productivity
Division of labour
Collaboration

Answer 3

Any three from:

Scalar chain
Centraliasation
Unity of command
Unity of direction
Division of labour

Question 4

“Teams where individuals are trained to perform a variety of different tasks” - what is the name of this principle?

Answer 4

Multi-skilling

Question 5

What is one way that an organisational strucuture can be communicated?

Answer 5

Organisational chart
Organisational manuals
Job descriptions

Question 6

Is “Techno-operation” a building block as part of the Mintzburg’s organisational structure?

Answer 6

No, it is called Techno structure

Question 7

What type of businesses typically adopt an “entrepreneurial structure”?

Answer 7

Owner managed businesses

Question 8

What is one advantage to an “entrepreneurial structure”

Answer 8

Quick decision making
Good control
Close bond to workforce
More responsive to market

Question 9

What is one disadvantage to an “entrepreneurial structure”

Answer 9

Lack of career structure
May be too centralised
Cannot cope with diversification / growth

Question 10

If an organisation has outgrown the entreprenuerial structure, they will need to organise the business on a ____ basis

What is the missing word

Answer 10

Functional

Question 11

A divisional structure is an organisation structured in accordance with _______

Answer 11

divisions / product lines / brands

For example, chemicals division, plastics division, electricals division, paper division

Question 12

The ___ structure aims to combine the benefits of the divisional structure and the functional structure

Answer 12

Matrix

Question 13

What factors may affect the degree of centralisation?

Answer 13

Geographic location
Size of the business
Management style and ability
Range of products / services/brands

Question 14

Centralisation refers to the degree of autonomy/decision making ability diffused through the organisation

True or false

Answer 14

False

Question 15

What are the two main differences between tall organisaions vs flat organisations

(A) Tall organisations have a wider span of control
(B) Flat organisations have more managerial levels
(C) Tall organisations have a narrow span of control
(D) Tall organisations have many managerial levels
(E) Flat organisations have many managerial levels

Answer 15

C and D

Question 16

Which statement is correct and is therefore a disadvantage to a sole trader?

High risk: about 70% of small businesses cease trading in the first 4 years
High risk: about 75% of small businesses cease trading in the first 4 years
High risk: about 80% of small businesses cease trading in the first 4 years
High risk: about 90% of small businesses cease trading in the first 4 years

Answer 16

High risk: about 75% of small businesses cease trading in the first 4 years

Question 17

What is one disadvantage that applies to both sole traders and partnerships?

Answer 17

Unlimited liability

Question 18

What is one advantage of operating as a group company?

Answer 18

Different companies can be responsible for different products
Easy to sell off part of business
Economics of scale through vertical integration