Chapter 16- Organisational Design

Question 1

The organisational structure of the business defines:

Answer 1

• The workforce roles of employees and their job titles
• The route through which decisions are made
• Who is responsible and who is accountable to whom, and for
  what activities
• the relationship between positions in a business

Question 2

Importance of structure

Answer 2

Structure is important to all businesses; it helps them to divide work and co-ordinate activities to achieve objectives. But it may be more important for larger businesses – for example, a two-person plumbing business is likely to have fewer problems deciding who does what than a business operating in many countries

One method of organising a business is where managers put people together to work effectively based on their skills and abilities – the structure is built up

In contrast a structure could be created first, with all appropriate workforce roles outlined, and then people employed to fill them

Question 3

Hierarchy

Answer 3

The order or levels in an organisation from lowest to highest

Question 4

Directors

Answer 4

Used to run the business for the interest of the owners. Owners can be directors. Directors are in overall charge of activities in an organisation.

Question 5

Managers

Answer 5

• controlling the business day to day – they often make day to day decisions about the running of the business

Question 6

Team Leaders

Answer 6

used to resolve issues within their team – e.g. investigating staff morale

Question 7

Supervisors

Answer 7

monitor and regulate work in an area- hire, discipline, promote, punish or reward

Question 8

Professionals

Answer 8

People within a team with a high qualification – these are positions for staff with high levels of qualifications – the jobs roles are likely to involve a degree of profession

Question 9

Operatives

Answer 9

Ensure that their team carry out the tasks instructed by managers or supervisors – examples might include IT, production, warehousing

Question 10

General staff

Answer 10

Variety of positions in business which are carried out by staff with non-specific skills – they follow instructions given by superiors to carry out particular tasks and are an essential part of the production process or service provision – e.g. checkout staff

Question 11

Chain of Command

Answer 11

The way authority/power is organised

Question 12

Span of Control

Answer 12

The number of people you are directly in charge of

Question 13

Authority

Answer 13

The right to command and make decisions – responsibility involves being accountable or being required to justify an action – the human recourses department may be responsible for employing workers – if a new worker was unable to do a particular job, they would be asked to explain why.

Question 14

Centralisation

Answer 14

A type of business/ organisation where major decisions are made at the centre/core of the business then passed down

Question 15

Tall structures

Answer 15

lots of layers of management but narrow span of control

With tall structures – the span of control can be small – this means that managers have a tighter control over their subordinates and as a result employer can be more closely supervised.

This is a clear management structure and a clear route for promotion. This might help motivate staff however management costs will be higher since there are more managers.

Communication may also be poor as there is a long chain of command. Also slow as approval needed at each stage of command.

Question 16

Flat structures

Answer 16

Few layers of the hierarchy but large span of control

Communication on flat structures may be better as the chain of command is shorter. Management costs are lower because there are fewer layers of management.

Decision making may be quicker because approval from several managerial layers is not required. Managers may lose control of the workforce because the span of control is too wide – as a result discipline may be lacking which could have a negative impact on productivity

Question 17

Matrix structures

Answer 17

Getting people together from different parts of the business to form a project team – matrix structures are often used to solve problems in a business

Managers often argue that this is the best way of organising people. This is because it is based on the expertise and skills of employees, and gives scope for people lower down the organisation to use their talents effectively.

For example, a product manager looking into the possibility of developing a new product may draw on the expertise of employees with skills in design, research and development. This structure improves flexibility and motivation of employees.

However, it is often needs expensive support systems such as office staff and there may be problems co-ordinating a team drawn from different departments

Question 18

Delayering

Answer 18

taking a layer of management out of a business

Question 19

Delegation

Answer 19

authority to pass down from superior to subordinate