Business Structures

Question 1

What is an organisational structure?

Answer 1

Grouping people in to departments and allocating responsibility and authority accordingly.

Question 2

What is the division of work?

Answer 2

Dividing work in a way that improves practice and familiarity - allowing for specialisation by trade.

Question 3

What is the unity of command?

Answer 3

Each subordinate is answerable to only one superior.

Question 4

What is the unity of direction?

Answer 4

Only one single individual sets plans

Question 5

What is the scalar chain?

Answer 5

The lines of authority that exist from the top to the bottom of an organisation

Question 6

What are organisational structures used for?

Answer 6

Defining relationships - establishing the flow of responsibility. Co-ordinating groups of individuals. Allows for a disciplinary system. Ensures those with responsibility have the relevant authority to do so.

Question 7

What is multi-skilling?

Answer 7

Having teams of individuals trained in a number of tasks and skill. Labour and other resources can be used more efficiently.

Question 8

What is flexibility?

Answer 8

Everything is flexible - structure/working hours/ teams. This allows any changes to be made quickly and easily when society demands it.

Question 9

What is an operating core?

Answer 9

The basic work of the organisation - what is it they do in basic terms.

Question 10

What is the strategic apex?

Answer 10

Higher management - those in charge with the power to make strategic decisions.

Question 11

What is the middle line?

Answer 11

The managers who link the top with the bottom. The ones that communicate with both sides.

Question 12

What is the technostructure?

Answer 12

Those who have the role of designing procedures and standards e.g IT, Accountants

Question 13

What is the support structure?

Answer 13

Those who provide supportive services

Question 14

What is the ideology?

Answer 14

What does the organisation value and believe in - this impacts what emphasis they place on the other building blocks.

Question 15

How can the building blocks link?

Answer 15

Co-ordinating through a hierarchy in a way that create standardised procedures. This allows for any areas that require training to be identified.

Question 16

What is a simple structure?

Answer 16

One with a simple environment, and tasks. It focuses on the strategic apex and there is a lot of direct supervision.

Question 17

What is machine bureaucracy?

Answer 17

A complex environment, lots of regulated tasks. Focuses on the techno structure and there is a lot of standardisation of the work.

Question 18

What is professional bureaucracy?

Answer 18

A complex environment with professional but simple systems. It has an operating core and there is a standardisation of skills across the board.

Question 19

What is a divisional structure?

Answer 19

Simple with very large but divisible tasks. The middle line is most important and it focuses on standardising outputs.

Question 20

What is adhocracy/ a matrix structure?

Answer 20

Complex and dynamic with lots of complex tasks. It focuses on the operating core and support staff with a focus on mutual adjustment (communicating adjustments that have to be made)

Question 21

What is an entrepreneurial structure?

Answer 21

One that is built around the owner and manager - common for small businesses. It flows straight from manager to subordinates. Allows for quick decisions and good control BUT it can be too centralised and doesn’t work well on expansion.

Question 22

What is a functional structure?

Answer 22

The business is structured in a way that best suits its function. Works best for small companies in a stable environment - not many different departments but is separated out nonetheless. Good for standardisation and increasing efficiency but not good for when there is a need to adapt quickly and diversify.

Question 23

What is a divisionalised structure?

Answer 23

The organisation is structured to suit how the business itself is divided e.g geography, brands, products. Managers have responsibility for their area and resources. Good for growth, especially geographically and for having clear lines of accountability. Bad as there is a risk of losing control and duplication across teams.

Question 24

What is the matrix structure?

Answer 24

Combines a divisional and functional structure. Used by organisations with many products and functions. Is a very flexible way of running a business - people work where they are needed - even across areas. Can dilute authority and become time consuming due to crossovers.

Question 25

What impacts centralisation/decentralisation?

Answer 25

The management style and how capable they are. The size of the organisation.
The range of products and services.
The geographic location.

Question 26

What is centralised vs decentralised?

Answer 26

Decisions made at the top vs decisions spread out to smaller groups.

Question 27

What is the span of control?

Answer 27

How many people report to one superior.

Question 28

What is a tall organisation?

Answer 28

One with many managerial levels - if it is too narrow and tall it can lead to a failure to delegate and micromanagement

Question 29

What is a flat organisation?

Answer 29

One with not many managerial levels but lots of subordinates. Can lead to a lot of supervision and not a lot of doing.

Question 30

Adv and Disadv of Tall?

Answer 30

Good opps for promotion, good supervision, good personal contact with manager. BUT. can limit delegation and be expensive. Also it can slow down decisions if there are a lot of managers to get through.

Question 31

Adv and Disadv of flat?

Answer 31

There is a lot of delegation and lower management costs as there are less managers. BUT. The managers can end up overworked because of how much supervision is required and there can be a loss of central control.

Question 32

How is tall or short decided?

Answer 32

The complexity of work. How much the industry changes. How capable management are - knowledge and experience. How expensive it is. Where people physically are.

Question 33

What is a mechanistic structure?

Answer 33

One that is very rigid and formal. It is hierarchical and control based. It focuses on task efficacy not the overall organisations effectiveness. It is often impersonal and the labour is very specialised. Occurs in stable businesses that rarely change.

Question 34

What is an organic structure?

Answer 34

One that is fluid and flexible. Often flat and informal. Your status in such an org would be determined by your knowledge and expertise. It has a focus on shared benefits and commitment to goals. It is suited to dynamic and changing environments.

Question 35

What is a joint venture?

Answer 35

A separate joint owned company. The two businesses are shareholders of ltd co and partnerships. Reduces competition, increases skills and access to markets. Can lead to business disputes.

Question 36

What is a strategic alliance?

Answer 36

A loose collaboration. Mutually beneficial agreements are made. These are easier to break off than joint ventures and take less commitment.

Question 37

What is a licensing/franchising arrangement?

Answer 37

One company allows another to manufacture its product or service. You buy the right to make money off that product.

Question 38

What is an agency agreement?

Answer 38

It is used for distribution - the agent is used as a go between for getting products to the customer e.g look fantastic for everything it stocks.