Chapter 12 - Organisational structure and design Flashcards
The nature of organisational structure
Why is a clear organisational structure important?
It ensures clarity in lines of communication and accountability, facilitating effective operations and goal alignment.
The nature of organisational structure
What two things become clear about organisational structure?
1) No single structure guarantees achievement of strategic objectives for all organisations.
2) Organisations need an optimal structure for their current operations but should remain flexible for change.
The nature of organisational structure
According to Johnson et al. (2017), what is the role of organisational structure?
It acts as the ‘skeleton’ of the organisation, providing the framework on which all other functions are built.
The nature of organisational structure
What was Chandler’s (1962) view on the relationship between strategy and structure?
Strategy should precede structure, as “structure follows strategy,” or inefficiency may result.
The nature of organisational structure
How did Quinn (1980) view the relationship between strategy and structure?
He argued that structure and strategy are intertwined, adapting to each other as organisational needs evolve.
The nature of organisational structure
What did Mintzberg (1994) conclude about the order of strategy and structure?
There is no single correct order; instead, “structure follows strategy as left follows right.”
The nature of organisational structure
What are the six key elements of organisational structure according to Robbins and Judge (2016)?
Specialisation, Departmentalisation, Chain of Command, Span of Control, Centralisation, and Formalisation.
The nature of organisational structure
What does ‘specialisation’ refer to in organisational structure?
Dividing tasks into specific jobs to leverage expertise in certain skills or knowledge areas.
The nature of organisational structure
What is ‘departmentalisation’ in organisational structure?
Grouping related specialised functions together within the organisation.
The nature of organisational structure
What is the ‘chain of command’?
The hierarchical line of authority in an organisation from top to bottom.
The nature of organisational structure
What does ‘span of control’ refer to?
The extent to which authority and decision-making are concentrated at the top of the hierarchy.
The nature of organisational structure
What does ‘formalisation’ mean in organisational structure?
The degree of discretion given to employees, reflecting how strictly tasks and roles are defined.
Traditional structural forms
What is a simple structure, and what are its key characteristics?
A structure common in small businesses, usually flat, with a single owner-manager making key decisions.
Traditional structural forms
What are the advantages of a simple structure?
Clear accountability, wide spans of control, and centralised authority
Traditional structural forms
What are the disadvantages of a simple structure?
The manager must handle all aspects, limited career progression, and focus on day-to-day over strategy.
Traditional structural forms
What is a functional structure?
A structure where specialised heads lead different functions as an organisation expands and diversifies.
Traditional structural forms
What are the advantages of a functional structure?
Senior skills breadth, focused decision-making, opportunities for career progression, and task specialisation.
Traditional structural forms
What are the disadvantages of a functional structure?
Task duplication, overburdened senior managers, differing function values, and short-term focus on individual functions.
Traditional structural forms
What is a divisional structure?
A structure organised by products, services, or geographic areas, with each division overseen by a senior manager.
Traditional structural forms
What are the advantages of a divisional structure?
Separation of strategy from operations, environmental responsiveness, and management skill development.
Traditional structural forms
What are the disadvantages of a divisional structure?
Loss of central control, potential division competition, high cost, and limited knowledge sharing between divisions.
Traditional structural forms
What is a matrix structure?
A structure combining functional and divisional elements, often with dual reporting lines and extensive cross-functional communication.
Traditional structural forms
What are the advantages of a matrix structure?
Utilisation of specialised skills across divisions, resource sharing, flexibility, and reduced silo mentality.
Traditional structural forms
What are the disadvantages of a matrix structure?
Potential power struggles, unclear accountability, risk of overburdening, and avoidance of accountability.
Traditional structural forms
What is a multinational structure?
A structure for companies operating internationally, which may vary from international divisions to transnational corporations.
Traditional structural forms
What are the four main types of multinational structures?
International divisions, local subsidiaries, global product divisions, and transnational corporations.
Traditional structural forms
What is a joint venture structure?
A strategic alliance where two or more parties collaborate in a formal legal structure while retaining autonomy.
Traditional structural forms
What are the advantages of a joint venture structure?
Retention of autonomy, limited liability, and reduced reputational risk.
Traditional structural forms
What are the disadvantages of a joint venture structure?
Increased administrative burden, potential for high costs, and risk of double taxation.
Emerging structural forms
What factors have influenced the development of emerging organisational structures?
Societal expectations, globalisation, and advancements in technology, including better education, computer literacy, and complex projects.
Emerging structural forms
What are the three key challenges for 21st-century organisations?
The speed of change and increasing uncertainty, the importance of knowledge creation and sharing, and the global nature of markets.
Emerging structural forms
What are boundary-less organisations, and what is their goal?
Organisations that aim to eliminate vertical and horizontal boundaries, decentralising decision-making with empowered teams.
Emerging structural forms
What are the four types of boundaries that boundary-less organisations aim to eliminate?
Vertical boundaries (hierarchy levels),
horizontal boundaries (between functions),
external boundaries (with customers, suppliers, regulators), and
geographical boundaries (locations and cultures).
Emerging structural forms
What is Handy’s shamrock organisational structure?
A structure with three types of workers: core workers (full-time employees), peripheral workers (part-time, casual, or freelance), and contract workers (outsourced or project-based roles).
Emerging structural forms
How did Handy’s shamrock structure evolve over time?
Handy later added the customer as a fourth dimension, where organisations involve customers in some tasks, like online booking or using self-service checkouts.
Emerging structural forms
What are core workers in Handy’s shamrock structure?
Full-time employees who provide the essential specialised and professional management functions of the organisation.
Emerging structural forms
What are peripheral workers in Handy’s shamrock structure?
Part-time, casual, or freelance workers employed only when required for specific tasks.
Emerging structural forms
What are contract workers in Handy’s shamrock structure?
Workers hired on a contractual basis, often for specific projects or outsourced roles like cleaning or IT work.
Emerging structural forms
What is a virtual structure in organisational design?
An organisation held together by collaboration and networking rather than formal structures or physical proximity, with a heavy reliance on IT and outsourcing.
Determining appropriate structures
Is there one ideal organisational structure for all companies?
No, there is no one ideal structure. Organisations must determine the optimal structure based on their strategy and needs at a given time.
Determining appropriate structures
What did Mintzberg suggest should be considered when adopting the right organisational structure?
Mintzberg suggested considering the rate of change, degree of complexity, market complexity, and competitive situation.
Determining appropriate structures
What is the importance of determining the right structure for an organisation?
The right structure ensures that the organisation can effectively implement its strategy and adapt to its environment.
Determining appropriate structures
What environmental factor refers to how quickly changes occur in the business environment?
The rate of change.
Determining appropriate structures
Which environmental factor considers how complex the operations or tasks are within the organisation?
The degree of complexity.
Determining appropriate structures
What does market complexity refer to in determining an organisational structure?
The variety of market factors, such as customer needs, competition, and technological changes that influence the business.
Determining appropriate structures
What does the competitive situation factor entail when choosing an organisational structure?
It refers to the level and nature of competition the organisation faces in its industry or market.
Determining appropriate structures
Why is it important to align organisational structure with strategy?
Because the structure must support the execution of the strategy, helping the organisation navigate the challenges of its environment.
