Chapter 2

Question 1

Mintzberg is organisational form
Five elements

Answer 1

Strategic apex

Middle line

Operating core

Technostructure,

Support staff

Question 2

Mintzberg’s organisational form.

Middle line.

Answer 2

Most important in divisional organisations, e.g. Mars

Middle managers that convert direction into tasks and procedures.

They seek autonomy.

Question 3

Operating core

Answer 3

Those that provide the outputs of the organisation.

They seek autonomy and mutual working.

Most important in a professional bureaucracy, e.g. university law firms.

Question 4

Techno structure

Answer 4

Advise the operating core

They seek to standardise through procedures and checking.

Most important in a machine bureaucracy e.g. car plants.

Question 5

Support staff

Answer 5

 They seek their expertise to be recognised as vital, e.g. finance or administration

Most important in an adhocracy, e.g. film production, or consultancy

Question 6

Advantages of centralisation

Answer 6

Experience people with an overview of the company make decisions

Insures policies are consistent throughout the company

Insures a quick decisions can be made without consultation

Procedures, such as ordering and purchasing can be standardise throughout the company leading to economies of scale

Question 7

Disadvantages of centralisation

Answer 7

Reduce the impact of the day today, experts

Risks, demoralising branch managers, who feel mistrusted or powerless

Question 8

Advantages of decentralisation

Answer 8

Reduces the stress and burdens of senior management

Empowers local managers. Encouraging them to be more innovative and motivated.

Subordinates may have a better knowledge of local conditions

Middle management, are groomed to take over higher positions.

Question 9

Disadvantages of decentralisation

Answer 9

Reduction in uniformity may unsettle customers who expect every retailer to look the same

Head office can see the big picture therefore, it’s instructions may prove more profitable than local managers intuition

Question 10

Tall organisations (long, scalar chain

Answer 10

More managers with a narrow span of control

Can suffer from having too many managers.

Expensive to run

Decisions can take a long time to reach the bottom of the organisation.

Good opportunities for promotion.

Managers do not have to spend as much time managing staff.

Question 11

Flat organisations (short, scalar chain)

Answer 11

Relatively few managers, each with a wide span of control

Decisions (but less scrutiny)

More susceptible to fraud or error 

Question 12

Open systems

Answer 12

Connected and interacts with its environment

System, Boundry allows interaction between the organisation and the outside world.

It has both controllable and uncontrollable inputs expressed predictable and unpredictable outputs

Open system is also exist within organisations, for example a public relations department

Question 13

Closed systems

Answer 13

A close system is isolated from and independent of its environment.

Can you close system. The system boundary separates the organisation from the environment?

Relatively close systems may exist within an organisation.

Question 14

Boundary of control

Answer 14

 The limit of an organisation is direct jurisdiction.

Typically described as an inside out view.

Anything the organisation has control over.

Question 15

Boundary of identity

Answer 15

The view from outside the organisation.

What will be assumed is within its area of responsibility

E.g. outsourced, CallCenter

Question 16

Entrepreneurial structure

Answer 16

New or small organisations

One person controls everything

Little specialism or formalisation

The founder has the power and creates a culture.

Informal work environment

Reacts quickly to challenges.

Question 17

Functional structure

Answer 17

More traditional

Organised around different, business functions

Functions are often categorised as departments or divisions

Traditionally, based on specialised functions, e.g. research and development, purchasing

An emphasis on rolls rather than the individuals who fill those roles

Tend to be bureaucratic and slow in distributing information (layers)

Question 18

Matrix structure

Answer 18

Organise around projects, such as designing building, marketing and selling

Communication tends to be horizontal between individuals, rather than upwards and downwards between departments

Built upon the principles of flexibility and general authority.

Question 19

Divisional structure

Answer 19

Each division is largely autonomous with its own subculture.

Central headquarters or head office will be limited, but typically retains some functions.

Question 20

Virtual structure

Answer 20

An example is a collection of small organisations who present themselves as a larger one.

Another example is an organisation based around a website, but almost activities are outsourced e.g. Uber

Question 21

Features of an affective internal control system.

OAP spasm.

Answer 21

Organisation – structure is set out in an organisation chart that clearly sets out reporting lines

Authorisation – all transactions and documents should be signed with limits in place

Personnel – there should be a robust recruitment and training procedures

Segregation of duties – no one person should carry out the entire process

Physical – locks on office doors, and passwords and computers.

Arithmetic – correctly added up and checked

Supervisory – supervise both physically and routinely

Management – should review all information received from reconciliations and communicate important controls.

Question 22

Shared service centre

Answer 22

A separate business unit created within a company to deliver a specific service or suite of services across the company

Operates like an independent business

Views of the departments in the organisation as customers

Aims to gain efficiency through continuous improvement standardisation of processes.

Utilises technology to bring efficiencies.

Question 23

Advantages of outsourcing

Answer 23

More independent says they will not be employees.

Likely to have more better qualified personnel available

Specialists in the service being provided

Potentially cheaper than having a fold apartment.

Question 24

Disadvantages of outsourcing

Answer 24

Addition of complication

Loss of function as a training ground for new recruits of the business

Possible loss of control.

It is an inflexible decision.

Question 25

Service level agreements,

Definition and content

Answer 25

Details a relationship with an outsourced partner to reduce disadvantages

– service level

– exit route, including any notice period and penalty payment for early exit

– timescale, when the contract expires

– software, ownership, and conditions of use

Employment issues, for example, the staff are moving from the company to the outsource company

The fee, including details of any penalties for non-compliance with agreed service levels

Question 26

Transaction costs

Definition

Answer 26

Indirect costs incurred when performing a particular activity.

If an activity has a low transaction costs are likely to be outsourced.

Question 27

Project management and project appraisal

Stages of the process

Answer 27

Initiation – appraise product to see if it’s feasible.

Planning – what needs to be done, and how well successfully measured

Executing – team members, perform roles and project manage

Controlling – tracking progress against plan and corrective action.

Review and close – anything we can do better next time