6 - Organisational Design Flashcards
What Are All The Models Of Organisational Structure?
(4 Points)
~ Functional.
~ Product-based.
~ Regional.
~ Matrix.
What Are The 4 Functional Areas Of A Business?
~ Marketing.
~ Operations.
~ Human Resources.
~ Finance.
Describe The Functional Organisational Structure
(4 Points)
~ When employees are organised based on their roles and functions.
~ E.g. Departments or functional areas of a business.
~ Looks to streamline efficiency and expertise in each functional area of a business.
~ Typically used in manufacturing industries, finance and healthcare.
What Are The Advantages Of A Functional Organisational Structure?
(3 Points)
~ There is specialisation within the functional area, making them more efficient.
~ These specialist skills can be developed overtime.
~ Easier to supervise compared to other organisational structures.
What Are The Disadvantages Of A Functional Organisational Structure?
(2 Points)
~ Could be conflicts between the functional area as they may not communicate or collaborate.
~ Meaning the business cannot be very flexible, causing them to be slower to react to change.
Describe The Product-Based Organisational Structure
(3 Points)
~ Business organises teams around different products or product ranges.
~ Each team has its own marketing, operations and finance departments but HR is usually centralised.
~ Useful to have when products are diverse and unique, requires specialised management.
What Are The Advantages Of
A Product-Based Organisational Structure?
(2 Points)
~ Focused expertise in each of the functional areas, making them more productive as they are niche to their particular area.
~ Faster more streamlined in decisions, innovations, production making them more efficient.
What Are The Disadvantages Of A Product-Based Organisational Structure?
(3 Points)
~ May lead to duplication of functions / resources can lead to DEOS, which is inefficient for a business.
~ Coordination between teams may be complex, hindering collaboration between teams.
~ Slow to react to external change.
Describe The Regional Organisational Structure
(2 Points)
~ When the organisation is divided into different geographical regions
~ Where each geographical region will have its own set of management.
What Are The Advantages Of
A Regional Organisational Structure?
(4 Points)
~ Local adaptation, able to tailer strategies to meet specific regional needs, adapt products to culture and market needs of that region.
~ Improve customer satisfaction, due to localised approach to better meet needs.
~ Streamlined as each region has its own departments, regional autonomy leading to faster decision making increasing efficiency for the business.
~ More flexible, easier to adapt to change as decentralisation.
What Are The Disadvantages Of A Regional Organisational Structure?
(3 Points)
~ Risk of regional inefficiencies and conflicts, may be a lack of communication collaboration between regions meaning no knowledge sharing.
~ Lack of standardisation of product and processes, where different regions may do things differently to others causing inconsistencies.
~ Cost duplications due to different regional departments, could lead to higher AC per unit which is inefficient.
Describe The Matrix Organisational Structure
(2 Points)
~ Where the employees report to both the functional manager and the project manager.
~ Used by large corporations, complex projects and technology / engineering businesses.
What Are The Advantages Of
A Matrix Organisational Structure?
(3 Points)
~ Increases the flexibility of the organisation, adapt quickly to changes.
~ Increases efficiency, expertise and skills can be shared across projects.
~ Increased collaboration, projects have a holistic view as all functional areas are involved.
What Are The Disadvantages Of A Matrix Organisational Structure?
(3 Points)
~ Employees may be unclear on who and what the priority is.
~ Power struggles and conflict between functional area and project.
~ Slow down communication as there are too many stakeholders.
What Are The Influences On Organisational Design?
(5 Points)
~ Delegation.
~ Span.
~ Hierarchy.
~ Authority.
~ Centralisation and decentralisation.
Describe Delegation
When managers give authority to subordinate employees to perform tasks or make specific decisions.
What Are The Advantages Of
Delegation?
(3 Points)
~ Subordinates may be empowered by the authority and responsibility. This would lead to higher motivation, more productive and more efficient.
~ Fosters culture of internal recruitment, as managers are giving authority to subordinates, being effectively trained. E.g. New manager can be hired internally.
~ Managers are able to fully focus on their complex tasks, simpler tasks are given to subordinates.
What Are The Disadvantages Of Delegation?
(2 Points)
~ Subordinates may be demotivated by increased workload, decreasing productivity.
~ Motivation can fall as a result, there is an increased risk of employees leaving the business, all the gains from internal recruitment may be lost.
Describe Span Of Control
(3 Points)
~ Shows the number of subordinates that a manager or supervisor is directly responsible for.
~ Wide span of control -> manager has many subordinates.
~ Narrow span of control -> manager has very subordinates.
Describe Levels Of Hierarchy
(2 Points)
~ Tall and thin -> where each superior is responsible for a few subordinates.
~ Wide and flat -> Each superior is responsible for a large number of subordinates.
Describe Centralised Structures
(4 Points)
~ Where control and therefore decision making is made by the highest layers of management.
~ E.g. CEO, board of directors and senior management.
~ Tall structures, suits authoritarian management, where employees are less skilled.
~ E.g. Fast food franchises.
What Are Advantages Of Centralised Structures?
(4 Points)
~ Quicker decision making as fewer staff involved, experienced.
~ Consistency in the aims, visions and culture of the business.
~ Motivation as there is a clear job to do, this can increase confidence making them more productive.
~ Maintains a tight control.
What Are Disadvantages Of Centralised Structures?
(2 Points)
~ Employees have less flexibility in decision making, leading to missed opportunities.
~ Affects motivation as employees may feel less empowered, motivated, which would decrease productivity and innovation.
Describe Decentralised Structures
(4 Points)
~ When control and decision making is delegated by the highest layers of management.
~ E.g. To middle / lower layers of management, departments and locations.
~ Flat structures, suits a democratic management, where employees are more skilled.
~ E.g. Tech start-ups.
What Are Advantages Of Decentralised Structures?
(3 Points)
~ Increases motivation as they are empowered, increasing motivation, productivity and innovation.
~ Flexible decisions making, seizing opportunities and no need to check with the top layer of management.
~ Internal recruitment, decreasing recruitment costs.
What Are Disadvantages Of Decentralised Structures?
(2 Points)
~ Less consistency, as the person it has been delegated to might have different plans which don’t align with culture and aims, causing differing customer experiences.
~ Depends on the skills and experience of the person being delegated.
