Chapter 2

Question 1

Define Management hierarchy

Answer 1

Is the arrangement that provides increasing authority at higher levels of the hierarchy

Question 2

Hierarchal management structure

Answer 2

Employees arranged into layers with power increasing further up the the hierachy

Ridged lines of communication - with mostly downward communications

Clearly identifiable organisational positions

Clearly identifiable span of control exists for each manger

Centralised decision making with management decisions and passing on instructions to those below them - this is referred to as a line of authority

Principle of unity of command, where each employee is directly responsible to one manager

Question 3

Define chain of command

Answer 3

Is a system that determines responsibility, supervision and accountability of members of the organisation

• ultimately one person only remains in control (advantage)
• information only flows one way (disadvantage)

Question 4

Define the principle unity of command

Answer 4

States that each employee within each organisation should report to only one supervisor

Question 5

Define span of control

Answer 5

Refers to the number of whom a manager is directly responsible for

(the person in charge of each division is called a manager)

Question 6

Define a flatter organisational structure

Answer 6

Organisational structure that has a wide span of control, few management levels and short chain of command

Question 7

Define management structure

Answer 7

The way in which parts of an organisation are formally arranged to link management, employees and function together to achieve objectives

Question 8

What has lead to flattered structures becoming more common?

Answer 8

Increased competition pressures and globalization has seen more firms recently ‘flattering’ their structures. Meaning there are fewer levels of management, therefore they can quickly implement changes to adapt to consumer needs and market conditions

Question 9

What are the effects of a flatter management structure

Answer 9

Fewer levels of staff between manager & employees – shorter, improved communication paths (efficient).
Employees actively involved in decision-making – improves empowerment and worker motivation.
Uses employee knowledge, skills, experience & potential for innovation.
Greater workplace flexibility and response to change.
Reduction in operating costs due to management downsizing
Fewer status distinctions, such as offices– encourages teamwork to achieve common goals.
Increases training and multiskilling of employees.

Question 10

Major disadvantage of flat management structures

Answer 10

Employees lack a specific boss to report to which creates confusion

Question 11

What are the basic types of management structures

Answer 11

Functional
Divisional
Matrix

Question 12

Define a functional structure

Answer 12

Involves grouping employees together according to task they will perform
E.g accounts in finance department

Question 13

Advantages / disadvantages of a functional structure

Answer 13

Positives =
A defied career pathway for employees
Possibility of higher degree of task specialization
The provision of good opportunities for skill and knowledge development
Efficient use of resources

Advantages Disadvantages
“A defied career pathway for employees
Possibility of higher degree of task specialization
The provision of good opportunities for skill and knowledge development
Efficient use of resources

disadvantages=
Lack of flexibility and cooperation due to it’s bureaucratic nature
A narrow departmental focus – as apposed to broader organisation wide focus
‘Empire building’ behaviors among personnel in each department; that is gaining and keeping control over resources, finances and human resources

Question 14

Explain geographic (divisional)

Answer 14

Based on divisions according to location e.g. general manager for Asia

Advantages
Employees can work and train in other countries
Allows wider access to markets

Disadvantages
Different languages can cause barriers in communication
expensive and time-consuming to travel

Question 15

Explain product based (divisional structure)

Answer 15

Based on divisions according to location e.g. general manager for Asia

Advantages
Employees can work and train in other countries
Allows wider access to markets

Disadvantages
Different languages can cause barriers in communication
Expensive and time-consuming to travel

Question 16

Explain customer based (divisional structure)

Answer 16

Departments based on types of customers dealt with by a group of employees

Advantages
Specialists in each area meaning customer’s needs are met by specialists

Disadvantages
Complex structure
Difficulties in effective communication due to complex structure

Question 17

Explain process based (divisional structure)

Answer 17

The grouping of people who are part of the same process

e.g car manufactures

Question 18

Explain the advantages / disadvantages of the divisional structure

Answer 18

Advantages:
The direction of expertise at specific customers, products, regions and processes
The encouragement of cooperation between organizational departments
Greater flexibility in adapting to environmental changes

Disadvantages:
Reduced benefits of ‘economies of scale’ because work can be duplicated
The potential to promote rivalry between divisions

Question 19

Define matrix structure

Answer 19

Involves bringing together specialists from different parts of an organisation to solve a specific problem or to undertake specific projects in teams

Question 20

Explain the advantages / disadvantages of the matrix structure

Answer 20

Enhanced flexibility – operations can be altered quickly to suit environmental circumstances
Enhanced communications, cooperation & teamwork throughout the organisation
Enhanced decision making – expert project teams become a critical source of info for managers
Collective expertise across the organisation, creating the best possible environment for problem solving

Disadvantages:
Sometimes the decisions made in project teams can undermine the ‘line of authority’
The matrix structure creates potential for the ‘unity of command’ principle to be challenged as people may be reporting to two managers
e.g. functional manager & project manager

Question 21

What has lead to flattered structures becoming more common?

Answer 21

Increased competition pressures and globalization has seen more firms recently ‘flattering’ their structures. Meaning there are fewer levels of management, therefore they can quickly implement changes to adapt to consumer needs and market conditions

Question 22

What are the effects of a flatter management structure

Answer 22

Fewer levels of staff between manager & employees – shorter, improved communication paths (efficient).
Employees actively involved in decision-making – improves empowerment and worker motivation.
Uses employee knowledge, skills, experience & potential for innovation.
Greater workplace flexibility and response to change.
Reduction in operating costs due to management downsizing
Fewer status distinctions, such as offices– encourages teamwork to achieve common goals.
Increases training and multiskilling of employees.

Question 23

Major disadvantage of flat management structures

Answer 23

Employees lack a specific boss to report to which creates confusion

Question 24

What are the basic types of management structures

Answer 24

Functional
Divisional
Matrix

Question 25

Define a functional structure

Answer 25

Involves grouping employees together according to task they will perform
E.g accounts in finance department

Question 26

Advantages / disadvantages of a functional structure

Answer 26

Positives =
A defied career pathway for employees
Possibility of higher degree of task specialization
The provision of good opportunities for skill and knowledge development
Efficient use of resources

Advantages Disadvantages
“A defied career pathway for employees
Possibility of higher degree of task specialization
The provision of good opportunities for skill and knowledge development
Efficient use of resources

disadvantages=
Lack of flexibility and cooperation due to it’s bureaucratic nature
A narrow departmental focus – as apposed to broader organisation wide focus
‘Empire building’ behaviors among personnel in each department; that is gaining and keeping control over resources, finances and human resources

Question 27

Define a divisional structure

Answer 27

Groups employees together according to divisions that may be geographical or customer, product or process focused

Commonly used by organisations producing a range of different products and services
Employees are grouped together based on divisions such as:
Customers
Geography
Products
Process

Question 28

Explain geographic (divisional)

Answer 28

Based on divisions according to location e.g. general manager for Asia

Advantages
Employees can work and train in other countries
Allows wider access to markets

Disadvantages
Different languages can cause barriers in communication
expensive and time-consuming to travel

Question 29

Explain customer based (divisional structure)

Answer 29

Departments based on types of customers dealt with by a group of employees

Advantages
Specialists in each area meaning customer’s needs are met by specialists

Disadvantages
Complex structure
Difficulties in effective communication due to complex structure

Question 30

Explain process based (divisional structure)

Answer 30

The grouping of people who are part of the same process

e.g car manufactures

Question 31

Explain the advantages / disadvantages of the divisional structure

Answer 31

Advantages:
The direction of expertise at specific customers, products, regions and processes
The encouragement of cooperation between organizational departments
Greater flexibility in adapting to environmental changes

Disadvantages:
Reduced benefits of ‘economies of scale’ because work can be duplicated
The potential to promote rivalry between divisions

Question 32

Define matrix structure

Answer 32

Involves bringing together specialists from different parts of an organisation to solve a specific problem or to undertake specific projects in teams

Question 33

Explain the advantages / disadvantages of the matrix structure

Answer 33

Enhanced flexibility – operations can be altered quickly to suit environmental circumstances
Enhanced communications, cooperation & teamwork throughout the organisation
Enhanced decision making – expert project teams become a critical source of info for managers
Collective expertise across the organisation, creating the best possible environment for problem solving

Disadvantages:
Sometimes the decisions made in project teams can undermine the ‘line of authority’
The matrix structure creates potential for the ‘unity of command’ principle to be challenged as people may be reporting to two managers
e.g. functional manager & project manager

Question 34

What is a network structure

Answer 34

Organizational structure where functions are outsourced to other organisations; the core organisation exerts control via outsourcing contracts.

Question 35

Advantages and disadvantages of a network structure

Answer 35

Advantages - being flexible and ready to adapt to changes in consumer demand.
Disadvantages – heavy dependence on technology and can cause problems in communication if computers crash

Question 36

Define cooperate culture

Answer 36

Refers to the values, ideas, expectations and beliefs shared by member of the organisation

Question 37

Characteristics of a cooperate culture

Answer 37

A pattern of shared basic assumptions
Developed and shared by the group
Representative of past success
Taught to new employees as the correct way of thinking, feeling and doing

Question 38

How to recognise cooperate culture

Answer 38

Company policies & objectives
Physical environment – colour scheme, architecture
Organisational structures and management styles
Organisational processes
Rituals & symbols – what is celebrated.
How people address each other
Language
Documentation – brochures & logos

Question 39

Differences in cooperate culture

Answer 39

Degree of risk taking and innovation
Attention to detail
People orientation- Wants and needs of employees when making decisions. E.g. work-life balance
Task or process orientation - Is focusing on results or how the results were obtained more important?
Team orientation
Level of Competitiveness
Emphases on ethical and social responsibilities
Diversity among employees – skills, ideas, ratio of males to female,
Age of the organisation – older organisations may have more traditional practices

Question 40

Elements of a cooperate culture:

Answer 40

Values - Organisational shared basic beliefs
e.g. honesty, hard work, quality customer service etc.

Symbols - Consist of events or objects that are used to represent something the organisation believes to be important (actions speak louder than words)

Rituals, rites and celebrations - Routine behavioral patterns in an organisations everyday life. Regular social gatherings can be held to help develop a sense of belonging

Heroes - Successful employees who reflect it’s values and therefore act as an example for others.

Question 41

Explain cooperates cultures affect on performance

Answer 41

Often employees work harder to achieve organizational goals if they consider themselves to be part of the corporate culture (have input into decision making).

Different cultures operating in one company can also impact employee performance. For example, if the organization maintains a reserved “talk when necessary” culture, employees may work accordingly

Once a positive cooperate culture is established it needs to be kept alive.
Management must ensure that staff members are given sufficient training to reflect the values of the organisation
Senior management in the firms must act as role models for the younger staff
Reward employees who exemplify appropriate values.

Question 42

Define planning

Answer 42

Is the process of setting objectives and deciding methods to achieve them

Often referred to as the primary management role

Question 43

Define strategic (long term planning)

Answer 43

Is long term planning usually over three to five years

Help achieve where the organisation wants to be in the market and what it wants to achieve in relation to it’s competitors

Question 44

Define tactical planning

Answer 44

flexible, adaptable medium term planning usually over two years, which assists in implementing the strategic plan

The emphasis is on how the objectives will be achieved through the allocation od resources

Question 45

Define operational planning

Answer 45

Provides specific details about the way the organisation will operate in the short-term

Daily, monthly or up to one year basis by lower-level supervisors and managers.
Detailed level of planning that implements strategies to ultimately achieve specific objectives

Question 46

Define a SWOT analysis

Answer 46

Involves the identification of the internal strengths and weaknesses of the organisation and the opportunities in and the threats from the external environment

Question 47

Explain the 5 steps of the planning process

Answer 47

Step 1 Define the objective – Management begins the planning process by considering where they believe the organisation is headed

Step 2 “Analyse the environment – a common analysis is known as “SWOT analysis” strengths / weaknesses / opportunities / threats.
This helps the organisations internal strengths and weaknesses and also opportunities in and threats from external environment

Step 3 Develop alternative strategies – in response to the Q ‘How will the organisation get there?’ – managers develop several strategies and agree to put one into action

Step 4 Implement an alternative. The strategy that has been agreed upon needs to be put into place

Step 5 Monitor and seek feedback on implemented strategy – management must set targets and access to see if they are met. If they are not met the planning process will have to be repeated. Any planned formed should be a living document, regularly viewed and revised if necessary.

Question 48

Strengths and weakness are both

Answer 48

Internal assessments

Question 49

Explain the characteristics of ‘strengths’

Answer 49

What is the organisation good at?
Which products are popular?
Are our customers loyal?
Do we have a skilled and motivated workforce?
Do we function effectively
Are we in a solid financial position
Is our equipment / resources functional, new “

Question 50

Explain the characteristics of ‘weaknesses’

Answer 50

Do we have competent managers and staff
Is our computer system obsolete
Have we experienced past failures
Have we been upgrading our facilities to keep pace with rivals

Question 51

Explain ‘opportunities’ in the external environment

Answer 51

What will new technology bring us?
Is the national economy strong?
Are interest rates low?
What are the possible new markets?
What other businesses can we acquire to expand the organisation"

Question 52

Explain ‘threats’ in the external environment

Answer 52

What trends have been evident in our markets?
Are there new law regulating what we do
Are there new competitors
Are current competitors taking over out market share”

Question 53

Define organising

Answer 53

Is the process of arranging resources and tasks to achieve objectives
e.g. arranging staff to jobs

Question 54

Explain the organisational process (3)

Answer 54

Translate the objectives of a business to relaity

Determining the work objectives: The work activities required to achieve management objectives must be determined – work activities are thus broken down into smaller steps

Classifying and grouping activities: Once the work activities of a business have been broken down into smaller steps, similar activities can be grouped together this improves effiency by enabling the most appropriate allocation of resources, it is common practice to group activities into departments or sections

Assigning work and delegating authority: Determine who is to carry out the work and who has the responsibility to ensure the work is done – delegation also involves ensuring the person who has been given the responsibility carries out the process – effective delegation can increase productivity and efficiency and increase job satisfaction for the employee

Question 55

Define leading

Answer 55

Is the process of influencing or motivating people to work towards the achievement of the organisations objectives

The type of leadership depends on the attitudes and assumptions that managers have about people in the organisation

Question 56

Managers can be categorised into what type of leaders

Answer 56

Transactional and transformational

Question 57

Explain transactional leading

Answer 57

Provides staff with rewards in return for their
Compliance and acceptance of authority
e.g. incentives such as pay-rises depending whether
goals are met

Question 58

Explain transformational leading

Answer 58

Leaders inspire or enthuses staff with a vision to ensure that they are committed to achieving the objectives of an
organisation.

They consider each staff member as unique individuals and provide opportunities for team members to exercise there own judgment (today most leaders are transformational)

Question 59

Define controlling

Answer 59

is the process of evaluating performance and taking corrective action to ensure that the set objective are achieved

Controlling compares what was intended to happen with what has actually occurred

Question 60

Explain the controlling process

Answer 60

Controlling process:
There are three steps in the controlling process:
Establishing standards in line with the objectives of the organisation

Measuring the performance of the organisation against those standards or benchmarks

Making changes when necessary to ensure the objectives of the organisation have been met

Question 61

Define divisions structure

Answer 61

Groups employees together according to divisions that may be geographical or customer or product or process focused

Question 62

Differences chart between traditional organisations (less fluid) and modern organisations (more fluid)

Answer 62

Decision making: centralised (decisions made at top of hierachy) // decentralised (spread out decision making)

Characteristics: task activity cantered, traditional conservative
 // people entered modern forward thinking contemporary 

Management structure: hierarchical - multi layered // flexible to change - flat structure - less layers of management

Performance appraisal: performance appraisal: do it our way // do it the best way

Communication: top down // 2 way by consensus

Delegation: top to bottom // agreement

Level of employee participation: low // high