Business functions and organizational structures Flashcards
What are some business functions?
-human resources
-sales and marketing
-research and development
-production
-customer service
finance and accounts
-Admin / IT
Organization by type
Global - complex organization structures
National- org possibly stretches throughout the country
regional- could be through a county or wider area
Local- small orgs serving local area or community
Organisation charts
hierarchical structure
Pyramidal structure
centralised / entrepreneurial
Purpose served by organizational structure
is the hierarchical arrangement in which
the essential tasks of an enterprise are subdivided and
- grouped to create the systems
- decision centers and
- behavioral network
that carries out enterprise strategies
Organisational design
the process managers go through to create meaningful
- structures
- decision and information networks
- governance systems
Authority
the right to make decisions out tasks
Span of control
the number of people a superior is responsible for
Chain of command
the relationship between different levels of authority in the business
Hierarchy
shows the line of mangement in the business and who has specific responsibilities
Delegation
giving/passing tasks from superior to subordinate
Empowerment
giving responsibilities / power to people at all levels of the business to make decisions
Tall VS flat organizations
Tall (army, catholic church) ….. relatively narrow span of control
Flat - Relatively wide span of control
Ways to structure a business
By function
By product or activity
By area
by customer
Matrix organization
incorporates dual responsibilities and reporting relationships
connecting selected functions with specific products or projects
with the project manager typically given overall responsibility and the budget to draw people from functional areas
Some fundamental trade-offs for balancing organizational design
Centralisation and decentralization
bureaucratic versus organic structures
wide versus narrow span of control
flat versus tall hierarchy
Centralisation
an organisation structure that concentrates authority and decision making toward the top of the organisation
more appropriate for large companies in slow changing industries
Decentralisation
A structure that disperses authority and decision making to operating units throughout the organisation
appropriate for organisations in complex, fast changing environments requiring flexibility
Autonomy
means granting power and responsibilities to followers in initiate innovation action that improves processes and performance, with results assessed against general goals
Control
control limits the authority given managers to shape decisions and resource allocations by specifying parameters and providing for higher level reviews, often with approvals prior to proceeding
Mechanistic structure
has a traditional look and feel, highly structured and formalized, typically with lots of “silos” bewteen work units
designed for conformance behaviors to handle routine functions appropriate to stable environments
Organic structure
has a looser look and feel that relies on the adaptive capacities and motivation of individuals
embodies postmodern structures
Bureaucracy
an efficiency orientated system of organisation that emphasis formalisation of roles and rules to promote control
Functional structure
Advantages
- specialisation, each department focuses on its own work
- accountability
- clarity- know yours and others roles
disadvantages
- could communication, lead to lack of focus
- departments can become resistant to change
- coordination may take too long
- gap between top and bottom
Organisation by product/activity
advantages
- clear focus on market segments helps meet customer needs
- positive competition between divisions
- better control as each division can act as a a seperate profit centre
disadvantages
- duplication of functions
- negative effects of competition
- lack of central control over each seperate division
Organisation by Area
Advantages
- serve local needs better
- positive competition
- more effective communication between firm and local customers
disadvantages
- conflict between local and central management
- duplication of resources and functions
