Chapter 2 Flashcards
Mintzberg is organisational form
Five elements
Strategic apex
Middle line
Operating core
Technostructure,
Support staff
Mintzberg’s organisational form.
Middle line.
Most important in divisional organisations, e.g. Mars
Middle managers that convert direction into tasks and procedures.
They seek autonomy.
Operating core
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.
Techno structure
Advise the operating core
They seek to standardise through procedures and checking.
Most important in a machine bureaucracy e.g. car plants.
Support staff
 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
Advantages of centralisation
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
Disadvantages of centralisation
Reduce the impact of the day today, experts
Risks, demoralising branch managers, who feel mistrusted or powerless
Advantages of decentralisation
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.
Disadvantages of decentralisation
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
Tall organisations (long, scalar chain
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.
Flat organisations (short, scalar chain)
Relatively few managers, each with a wide span of control
Decisions (but less scrutiny)
More susceptible to fraud or error 
Open systems
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
Closed systems
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.
Boundary of control
 The limit of an organisation is direct jurisdiction.
Typically described as an inside out view.
Anything the organisation has control over.
Boundary of identity
The view from outside the organisation.
What will be assumed is within its area of responsibility
E.g. outsourced, CallCenter
Entrepreneurial structure
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.
Functional structure
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)
Matrix structure
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.
Divisional structure
Each division is largely autonomous with its own subculture.
Central headquarters or head office will be limited, but typically retains some functions.
Virtual structure
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
Features of an affective internal control system.
OAP spasm.
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.
Shared service centre
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.
Advantages of outsourcing
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.
Disadvantages of outsourcing
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.
Service level agreements,
Definition and content
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
Transaction costs
Definition
Indirect costs incurred when performing a particular activity.
If an activity has a low transaction costs are likely to be outsourced.
Project management and project appraisal
Stages of the process
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
