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Business organisation and Structure Flashcards

1
Q

Organisational structure?

A

Organisational structure is the division of work and its allocation. Outlines roles and responsibilities of individuals and groups.

E.g different departments and stuff

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2
Q

Types of Organsiational Structures?

A

1.Entrepreneurial Structure
(Small company with the creator and employees)

2.Functional/Departmental Structure
(Structured department wise)

3.Divisional/product structure
(Each division overseeing a product, a geographic section, customer (corporate clients and private clients)

4.Geographically Structured
(Location based structure)

  1. Matrix Structure
    (combination of Departmental and divisional Structure)
  2. Boundaryless Structure
    (Dose not follow the norm and flexible to the point of having no hierarchy)

Further divided into
# Hollow organisation
# Virtual organisation
#Modular organisation

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3
Q

Entrepreneurial Structure?

A

Basically an entrepreneur in the early stages of a company.

The entrepreneur is the owner/manager and has specialist knowledge of the product and service they provide.

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4
Q

Structure of Entrepreneur organisation?

A

Entrepreneur
.
:
:
Employees

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5
Q

Advantages of Entrepreneurial Structure

A

Fast decision making
More responsive to the market
Goal Congruence(matching Goals)
Good Control (over workforce)
Close Bond to Workforce

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6
Q

Disadvantages of Entrepreneurial Structure?

A

Lack of Career Structure
(The structure/path of advancement of an employee within an organisation)

Dependent on Capabilities of manager/owner
(the entrepreneur)

Cannot cope with diversification/growth

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7
Q

Another name of Functional Structure? Think departments in company.

A

Departmental Structure.

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8
Q

Features of Functional Structure?

A

Employees are grouped together in departments based on task congruence (similarity between tasks)

The next stage after entrepreneurial Structure (from small company to little bit better).

Appropriate for small organisation that have few products or locations.

They exist in a STABLE ENVIRONMENT with less outside factors. (like competition and environmental changes)

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9
Q

Structure of Departmental organisation?

A

Board of directors

Finance dep Production Dep Marketing Dep Personnel Dep

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10
Q

Advantages of departmental or functional Structure?

A

Economies of Scale
(Larger company more production)

Standardization
(Standardization of output/systems).

Specialist more comfortable
(People with similar skill are grouped together by departments)

Career Opportunities (Availability of career path to follow)

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11
Q

Disadvantages of Functional/Departmental structure?

A

Empire Building
( As in literal empire creation by managers for more power/ Powerplay at its highest)

Slower decision making (longer chain of command)

Conflicts between departments
(mostly due to managers empire building)

Cannot cope with diversification (Fast growing companies will have interdepartmental problems with production etc)

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12
Q

What is Divisional/Product structure?

A

The organisation is split into several divisions where each one AUTONOMUSLY oversee a product, a geographic section, or customer (corporate client and private client).

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13
Q

Features or basic structure of Divisional/product type?

A

Each division are run as profit centres with their own revenues expenditure and capital investments.

Each division is separately identified part of the whole organsiation. SBU

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14
Q

Expand SBU?

A

Strategic Business unit

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15
Q

What is SBU?

A

A strategic business unit is an independently managed division of a large organisation with its own vision, mission, and objectives.

A strategic business unit (SBU) is an ideal tool to help a business target its group of customers more effectively.

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16
Q

Which structure has SBU?

A

The SBU is found in divisional/product structure.

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17
Q

Advantages of Divisional/product structure

A

Enables growth and diversification(The company just needs to add new division “bolt on” )

Clear responsibility for products/divisions (As each division specialize in only one main product)

Top management free to concentrate on strategic matters (As they don’t need to meddle with different divisions)

Speed of decision making increase inside division.

General managers don’t need specialization in any one field.

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18
Q

Disadvantages of product/divisional structure?

A

Loss of control by upper management (Since every division is autonomous)

Lack of goal congruence (Since every division has it’s own goals)

Specialists may feel isolated.

Allocation of central costs can be a problem (Accounting/human resources (workers) are provided centrally.)

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19
Q

What is a geographically structured organisation?

A

Similar to divisional structure whereas when divisional structure may have some divisions for location, geographically structured organisations are divided based on geographical location.

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20
Q

Advantages of geographically structured organisation?

A

Enables geographic growth (growth locally)

Allow local decision making

clear Responsibility distinction for areas.

training of general managers (IDK)

Top management free to concentrate on strategic matter

21
Q

Disadvantages of geographical structure organisation?

A

Same as divisonal/product structure

Loss of control by upper management (Since every division is autonomous)

Lack of goal congruence (Since every division has it’s own goals)

Specialists may feel isolated.

Allocation of central costs can be a problem (Accounting/human resources (workers) are provided centrally.)

22
Q

Thinking practically what is preferred Product or geographical structure?

A

Product structure is preferred over geographic structure because product has more complex requirements such as high cost of capital equipment and skilled operators.

e.g. the car industry.

23
Q

What is a Matrix structure?

A

It is a combination of departmental and divisional structures.

They would have to report to two different managers.
(check figure in page 24)

24
Q

Advantages of Matrix structure?

A

Advantages of both departmental and divisional structures.

Flexibility ( Flexibility in using multiple divisions together for achieving objectives)

Customer oriented

Encourage teamwork and the exchange of opinions and expertise.

25
Q

How are boundary less organisations further classified into?

A

Further divided into
# Hollow organisation
# Virtual organisation
#Modular organisation

26
Q

What are boundaryless organisations?

A

Boundaryless organisation structure is essentially unstructured design providing more flexibility without the constraint of having a chain of command.

27
Q

What is outsourcing?

A

Contracting work to specialists (oustsiders) /out of an organisation’s aspects.

28
Q

What is Hollow organisations?

A

They split their work into core (strategically important) and non-core activities. The non-core activities are then outsourced to other organisations.

29
Q

Virtual Organisations?

A

This occurs when an organisation outsources all work to other organisation and simply exist as a network of contracts, with very few functions (sometimes none) kept in house.

Example: Internet retailers:
Products made by different manufacturers, sales are delivered by third-party couriers and website may be hosted by external IT specialists.

30
Q

Modular Organisation?

A

These are companies that break down their manufacturing process into various modules/components where each component is then made by the company or outsourced.

31
Q

Who wrote Structure in Fives?

A

Henry Mintzberg (He is also the dude who said experience cannot be obtained from classroom.)

32
Q

According to Henry Mintzberg how are organisations structured?

A

Organisations are made of five key building blocks.

1)Strategic apex- Senior level management

2)Middle line-Middle management

3)Operating core- Wokers/ employees

4)Technostructure- Analysts who plan and control (setting standards) of others

5)Support Staff- Admin support and indirect services

Ideology- The organisations belief or values that can be discerned by examining the norm in the workplace.

33
Q

what is ideology?

A

The organisations belief or values that can be discerned by examining the norm in the workplace.

34
Q

Illustration 2 in page 28 is important

A

Illustration 2 is very important.

35
Q

What happens when any of the building blocks proposed by Henry Mintzberg dominates?

A

It can lead a six possible structures.

36
Q

What are the six structures formed by domination of the Mitzberg’s building blocks?

A

The Simple Structure (Strategic Apex dominates)

Machine bureaucracy (Technostructure dominates)

Professional Bureaucracy (operating core dominates)

Divisionalised (middle line dominates)

Adhocracy (Support Staff Dominates/operating core dominate)

Missionary (ideology dominates)

37
Q

Explain simple structure? Who dominates in these structures?

A

The apex/senior level management dominates in this structure.

One or few of top managers control the rest of the workforce by the way of direct supervision.

E.g. Small and newly formed businesses

It is also called entrepreneurial structure and similar to the structure it cannot handle growth and diversification.

38
Q

Another name for the simple structure?

A

entrepreneurial structure

39
Q

What is machine bureaucracy? Who dominates?

A

In Machine bureaucracy the technostructure dominates (those who control and plan work for others. Analysts)

They control other employees, so they set standards. Work becomes very formalized with large number of rules and procedures, with large number of plans and budgets.

E.g. Large organisations and government agencies.

40
Q

What is professional bureaucracy ? Who dominates here?

A

Operating core dominates(workers/employees)

They occur in organisations that rely on highly skilled staff, such as medical of legal industries. They are similar to bureaucracy because of large number of rules and procedures but decision making is DECENTRALISED.
This makes each individual staff have more power.

Hard for senior managers(strategic apex) to control this sort of organisations.

E.g. Doctors and lawyers (they are important in their organisation.

41
Q

What is Divisionalised structure? Who dominates here?

A

Middle line dominates here (middle management).

Similar to Divisional structure. The middle line managers will have a great deal of control over day to day operations and strategy of their part of the business.
The directors will focus the “big picture” major decision making.

E.g. think hard

42
Q

Adhocracy type? Who dominates here?

A

Supporting staff/operating core dominates

Team of experts from different fields are chosen and decision are decentralised, with power being allocated where it is needed.

No standardisation like Machine bureaucracy.

E.g. Dynamic fast moving companies focused on innovation like High-tech and pharmaceutical industries,

43
Q

What does the strategic apex focus on in a divisionalised structure?

A

They focus on the major decision making and leaves day to day operations to middle management.

44
Q

Missionary type organisation? What dominates?

A

ideology dominates here (beliefs and values (cultures)

The mission and beliefs of the organisation are dominant, with all employee actions related to this.
Behaviour and norms become standardized. (follow the faith of the business)

45
Q

What is separation of direction and management?

A

In larger companies ownership and management are separated. The shareholders elect the directors to run the company and sets safeguards and controls to make them run it in the owners(shareholders) best interest.

Similarly direction and management may also be separated.
Where directors often leave issues to managers.

46
Q

What is scalar chain?

A

Scalar chain is the chain of all supervisors from the top management to the person working in the lowest rank. Scale chain identifies the path along which communication has to flow in order for the communication to be effective in an organisation.

47
Q

What is span of control? (organisational concept)

A

It refers to the manager’s span of control or the number of people for whom he/she is responsible.

48
Q

What are the different factors that influence the manager’s span of control?(in a workplace)

A

The nature of work:
The more repetitive or simple the work, wider the span of control.

The type of personnel:
the more skilled and motivated the managers and other staff members are, the wider the span of control can be.

The location of personnel- If the personnel are all located locally, it is relatively easier to control and supervise them.

49
Q
A

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