Ch 14 Organisation structure (A Level)

Question 1

Why do businesses need organisational structure?

Answer 1

indicates who has overall responsibility for decision making

formal relationships

the way in which accountability and authority may be passed down
number of subordinates reporting to each senior manager

formal channels of communication - vertical or horizontal

identity of supervisor and managers

Question 2

Define matrix structure

Answer 2

an organisational structure that creates project teams that cut across traditional functional departments

Question 3

Advantages of matrix structure

Answer 3

Allows total communication between all members of the team, cutting across traditional boundaries between departments

There is less chance of people focusing on just what is good for their department. This is replaced with a feeling of what is good for the project and business as a whole

Crossover of ideas between people with specialist knowledge in different areas tends to create more successful solutions

This system is well designed to respond to changing markets or technical conditions

Question 4

Disadvantages of matrix structure

Answer 4

Less direct control from the top => this passing down of authority to more junior staff could be difficult for some managers to come to terms with

Team members may have two leaders if business retains levels of hierarchy but allows cross departmental teams => cause conflict of interests which can result in inefficiency

Workers are frequently chosen to participate on cross-functional teams because they possess a broad and diverse skill set. However, in general, the wages earned by an individual increase in relation to the skills he or she possesses

Question 5

What are the key principles of organisational structure?

Answer 5

Level of hierarchy

Chain of command

Span of control

Delegation

Question 6

Level of hierarchy

Answer 6

A stage if the organisational structure at which the personnel on it have equal status and authority

Question 7

Chain of command

Answer 7

the route through which authority is passed down an organisation
taller organisation, longer the chain of command

Question 8

Span of control

Answer 8

the number of subordinates reporting directly to a manager

Question 9

Delegation

Answer 9

passing authority down the organisational hierarchy

Question 10

Advantages of delegation

Answer 10

gives senior managers more time to focus on important, strategic roles

shows trust in subordinates and this can motivate and challenge them
develops and trains staff for more senior positions

helps staff to achieve fulfilment through their work (self-actualisation)

Question 11

Disadvantages of delegation

Answer 11

if the task is not well defined or if inadequate training is given, delegation is unlikely to succeed

delegation will be unsuccessful if insufficient authority is given to the subordinate who is performing the tasks

managers may only delegate boring jobs that they do not want to do - this will not be motivating

Question 12

Define centralisation

Answer 12

keeping all of the important decision-making powers within head office or the centre of the organisation

Question 13

Define decentralisation

Answer 13

decision making powers are passed down the organisation to empower subordinates and regional/product managers

Question 14

Advantages of centralisation

Answer 14

A fixed set of rules and procedures in all areas, lead to rapid decision making

consistent policies throughout the organisation. prevents any conflicts between divisions, avoids confusion of consumers

Senior managers take decisions in the interest of the whole business

Central buying should allow for greater economies of scale

Senior managers at central office will be experienced decision makers

Question 15

Advantages of decentralisation

Answer 15

More local decisions can be made that reflect different conditions - the managers who take the decision will have local knowledge and are likely to have closer contact with customers

More junior managers can develop and this prepares them for more challenging roles

Delegation and empowerment are made easier and these will have positive effects on motivation

Decision making in response to changes should be quicker and more flexible as head office wil not have to be involved every time

Question 16

Define delayering

Answer 16

removal of one or more of the levels of hierarchy from an organisational structure

Question 17

Links between level of hierarchy and chain of command

Answer 17

greater levels, longer chain of command
consequences:
communication ineffectiveness
smaller spans of control
delegation likely to be limited
reduced motivation

Question 18

Links between delegation and accountability

Answer 18

Delegation gives subordinates the authority to perform certain tasks => have power to undertake jobs and make decisions necessary for these jobs to be completed
If job is done poorly then the worker is accountable to his or her immediate manager - they can be held to account and be disciplined for inadequate performance
However, responsibility for the work of the department (including subordinates performance) rests with the manager
Control of work is achieved by means of appraisals, monitoring against targets
Manager delegates AUTHORITY not RESPONSIBILITY

Question 19

Define line managers

Answer 19

managers who have direct authority over people, decisions and resources within the hierarchy of an organisation

Question 20

Define staff managers

Answer 20

managers who, as specialists, provide support, info and assistance to line managers

Question 21

Conflicts between staff managers and line managers

Answer 21

Staff managers can be economists, special market researchers,…etc. Due to their professional status and experience, they can be well paid but often accused of having less loyalty as their services might be demanded by other firms. Line managers, thus, might resent them

Question 22

Define informal organisation

Answer 22

the network of personal and social relations that develop between people within an organisation

Question 23

factors influencing organizational structure

Answer 23

styles of managers centralized or decentralized(manager x or y)

no. of employees arrange them in a way which is easy to manage

corporate long term short term objectives of business

tech employed sending emails rather then letters