Business Organisation, Structure & Strategy Flashcards
An informal organisation consists of: (4)
- Social relationships
- Informal communication networks
- Behavioural norms
- Power / Influence structures
Benefits of the informal organisation: (5)
- Employee commitment
- Knowledge sharing
- Speed
- Responsiveness
- Co-operation
Managerial problems of informal organisations: (4)
- Groupings act collectively; time and energy away from work
- Grapevine is inaccurate; morale-damaging
- Excluded from cliques or networks
- Cut corners, safety & quality measures violated
Managers can minimise problems associated with informal organisations by: (3)
- Meet needs through the formal organisation
- Harnessing dynamics - informal leaders to secure commitment
- Involve managers in the informal organisations
Key terms when speaking about groups include:
- Compliance
- Internalisation
- Counter-conformity
- Identification
- Sanctions
Mintzberg believes all organisations can be analysed into 5 components:
- Strategic apex
- Middle line
- Operating core
- Technostructure
- Support staff
Functional departmentation: Organisations can be departmentalised on the following basis: (6)
- Functional (Marketing, finance)
- Geographical
- Product
- Brand basis
- Matrix basis (Report to product manager and country manager)
- Hybrid
Advantages of Functional Departmentation: (4)
- Expertise is pooled
- Avoids duplication
- Facilitates recruitment, management and development of functional specialists
- Suits centralised businesses
Disadvantages of Functional Departmentation: (4)
- Focuses on processes and inputs, rather than customers and outputs - less able to adapt to changing demand
- Communication problems - own jargon
- Poor co-ordination - Referred upwards, tall structures
- Vertical barriers to information and work flow
Advantages of Geographic Departmentation: (2)
- Local decision-making
2. Cheaper
Disadvantages of Geographic Departmentation: (2)
- Duplication; loss of economies of scale
2. Inconsistency in methods or standards
Product / brand Departmentation groups activities…
based on products or product lines;
A divisional manager is given responsibility for the product or product line, with authority over personnel of different functions
Advantages of Product / Brand Departmentation: (3)
- Accountability
- Specialisation
- Co-ordination
Disadvantages of Product / Brand Departmentation: (2)
- Increases overhead costs
2. Divisions may fail to share resources and customers
Divisionalisation is
the division of a business into autonomous regions or product businesses, each with its own revenues, expenditures and capital asset purchase programes, and therefore each with its own profit and loss responsibility
Successful divisionalisation requires 6 key conditions:
- Properly delegated authority
- Large enough to support management
- Non-reliance on head office management support
- Potential for growth
- Scope and challenge for management
- If dealing with each other - arms’s length transaction
Advantages of Divisionalisation: (5)
- Focuses attention on business performance
- Reduces continuation of unprofitable products and activities
- Greater attention on efficiency, lower costs and higher profits
- Succession planning - more authority to junior managers
- Reduces levels of management - report directly to the CEO
Disadvantages of Divisionalisation: (3)
- Impossible to identify independent products or markets
- Only possible at fairly senior management level - limit to how much discretion can be used
- Resource problems - getting them from head office
Advantages of Matrix organisation: (5)
- Greater flexibility (People, workflow & decision making, tasks & structure)
- Interdisciplinary cooperation - improved communication and coordination
- Motivation and employee development
- Market awareness
- Horizontal workflow
Disadvantages of Matrix organisation: (4)
- Dual authority: conflict between functional and product / project / area managers
- Conflicting demands, ambiguous roles
- Cost: more managers, more meetings
- Slower decision making due to complexity
The new organisation focuses on flexibility by focusing on: (6)
- Flat structures
- Horizontal structures (multiskilling)
- Chunked / unglued structures (Team working, decentralisation)
- Output-focused structures
- Jobless structures
- Virtual organisations
Shamrock Organisations (Flexible firms) have… (NB)
…a core of essential exectuives and workers supported by outside contractors and part-time help.
Shamrock Organisations have 4 ‘leaves’: (NB)
- Professional core (What the business does / what business it is in, ‘essential’)
- Self-employed professionals (contracted project-by-project)
- Contingent workforce
- Consumers (Assemble-it-yourself (IKEA), Bag your own groceries)
Span of control or span of management refers to…
…the number of subordinates responsible to a superior
3 factors influence the span of control:
- Manager’s capabilities
- Nature of manager’s workload (Solitary, Entrepreneurial, Interaction, Supervision)
- Geographical dispersion
The more non-supervisory work, the…
…narrower the span of control
…the greater the delegation of authority to subordinates
Arguments FOR tall organisations include: (3)
- Narrow control
- Small groups enable team member participation
- Large number of steps assist in management training and career planning
Arguments AGAINST tall organisations include: (3)
- Inhibits delegation
- Rigid supervision blocks initiative
- Increased admin costs, slower decision making
Arguments FOR flat organisations include: (3)
- More delegation opportunities
- Relatively cheap
- Speedier communication
Arguments AGAINST flat organisations include: (3)
- Requires that jobs CAN be delegated
- Sacrifices control
- Middle managers are needed to convert vision into operation
Delayering is…
…the reduction of the number of management levels from bottom to top
The levels of strategy in an organisation include: (3)
- Corporate (Whole business)
- Business (SBUs)
- Operational / functional
Corporate strategy is concerned with…
…what types of business the organisation is in
Defining aspects of corporate strategy include: (6)
- Scope (Whole organisation; all parts should support & further the plan)
- Environment (Customers, clients, competitors)
- Resources
- Values (systems of people with power in the organisation)
- Timescale (Long-term)
- Complexity (Uncertainty)
Business strategy is…
…how an organisation approaches a particular product market area
Functional / Operational strategies deal with…
…specialised areas of activity
Functional areas include: (6)
- Marketing
- Production
- Finance
- HR Management
- Information Systems
- R&D
The Anthony Hierarchy classifies managerial activity on 3 levels:
- Strategic management (Senior)
- Tactical management (Middle)
- Operational management (Supervisors & operatives)
Strategic management is concerned with: (3)
- Direction-setting
- Policy making
- Crisis handling
Strategic management typically has implications for…
…3 to 5 years
Tactical management is concerned with: (3)
- Establishing means to the corporate ends
- Mobilising resources
- Innovating
Tactical management typically have ___ implications.
medium term
Operational management is concerned with…
…routine activities to carry out tactical plans
Operational management typically deal with…
short term matters
A centralised organisation is one in which…
…authority is concentrated in 1 place
Advantages of centralisation include:
- Greater control & coordination
- Wider view of problems and consequences
- Balance interests of different functions
- Higher quality of decisions
- Cheaper
- Quicker crisis decisions
- Standardised policies, procedures and documentation
Advantages of decentralisation include:
- Greater flexibility
- Avoids overburdening top managers
- Improves motivation of junior managers
- Greater awareness of local problems by decision makers
- Greater speed of decision making
- Develops junior manager skills and supports succession
- Separate spheres of responsibility can be identified
- Communication technology allows local decisions with input from head office
