Chapter 2 - Internal Environment of Large Scale Organisations

Question 1

Define ‘Management Hierarchy’

Answer 1

Management hierarchy is the arrangement that provides increasing authority (can add on accountability & responsibility) at higher levels of the hierarchy.

Question 2

Describe the three levels of a management hierarchy

Answer 2

• Top/Senior/Executive management team are the board of directors, chief executive officer (CEO), managing director and they are responsible for the vision, mission statement and strategic (long-term) planning
• Middle management team are the department/divisional heads, plant/store managers and they are responsible for departmental/divisional objectives and tactical (medium-term) planning
• Frontline/Supervisory management team are team/frontline managers, supervisor, team leaders who are responsible for sectional/sub-departmental planning and operational (short-term) planning

Question 3

List some of the characteristics of the management hierarchy

Answer 3

• rigid lines of communication (top-down)
• clearly distinguishable organisational positions roles and responsibilities
• centralised control with all strategic decisions made by senior management
• a chain of command showing who is responsible for whom

Question 4

Define ‘Chain Of Command’ or ‘Line Of Authority’

Answer 4

This is a system that determines respoinsibility, supervision and accountability of members of the organisation

Question 5

Define ‘Unity Of Command’

Answer 5

The principle of unity of command states that each employee within an organisation should report to only one supervisor

Question 6

What is ‘Span of Control’?

Answer 6

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

Question 7

List some differences between a traditional and a new & emerging organisation

(T is for traditional, EN is for new and emerging)

Answer 7

• T is centralised while EN is decentralised
• T is task/activity centred while EN is people centred
• T is autocratic (do it my way) while EN is democratic (do it the best way)
• T has division of labour while EN are multi-skilled/multi-tasked
• T has no power shared (exclusive) while EN is equal-power sharing (inclusive)

Question 8

What is the purpose of establishing a management structure?

Answer 8

The purpose of establishing a management structure is to arrange work tasks in logical sequences and combinations to avoid duplication, waste and inefficiences

Question 9

Define a ‘functional structure’

Answer 9

A functional structure involves grouping employees together according to the tasks or jobs they will perform (task structure).

Question 10

List the main advantages of a functional structure

Answer 10

• clear career pathways
• high degree of task specialisation
• efficient use of resources

Question 11

List the main disadvantages of a functional structure

Answer 11

• lack of flexibility
• narrow department focus
• ‘empire’ building behaviours

Question 12

Define a ‘divisional structure’

Answer 12

A divisional structure groups employees together according to divisions that may be geographical, or customer, product or process focused.

Question 13

List the main advantages of a divisional structure

Answer 13

• expertise of specific customers, products, process or geography (more efficient)
• encouragement of cooperation between departments
• greater flexibility

Question 14

List the main disadvantages of a divisional structure

Answer 14

• reduce benefits of economies of scale (may cost more to produce)
• potential rivalry between departments

Question 15

Define a ‘matrix structure’

Answer 15

The matrix structure involves bringing together specialists from different parts of the organisation to solve specific problems or to undertake specific projects in teams.

Question 16

List the advantages of a matrix structure

Answer 16

• enhanced flexibility

- enhanced communication, team work and decision making

Question 17

List the disadvantages of a matrix structure

Answer 17

• confusion with authority/can undermine line of authority

- unity of command can be challenged

Question 18

What is corporate culture?

Answer 18

Corporate culture refers to the values, ideas, expectations and beliefs shared by members of the organisation. (can elaborate by taking about official and unofficial corporate culture)

Question 19

Explain how organisational structure and corporate culture are linked

Answer 19

• formal structure creates culture of loyalty, respected, defined roles
• flatter management structures can encourage risk taking and innovation culture

Question 20

List the 4 elements of corporate culture

Answer 20

• values and practices
• symbols
• rituals, rites and celebrations
• heroes

Question 21

Describe ‘values and practices’

Answer 21

These are the ways things are done in the organisation

e.g. honesty, hard work, team work, quality, customer service, employee participation and innovation

Question 22

Describe ‘symbols’

Answer 22

These are the events or objects that are established to represent something the organisation believes to be important.
e.g organisations that believe in fostering positive competition among employees or an active lifestyle can organise various sporting events, or, organisations that want to reinforce a strong employee development culture can offer employees the opportunity to participate in training and development programs

Question 23

Describe ‘rituals, rites and celebrations’

Answer 23

These are the routine behavioural patterns in an organisation’s everyday life.
e.g. regular social gatherings can be held to help develop a sense of belonging among employees who work in small teams during the week

Question 24

Describe ‘heroes’

Answer 24

Heroes or champions are the organisation’s successful employees who reflect its values and, therefore, act as an example for others.

Question 25

Describe why positive corporate culture is important

Answer 25

Positive corporate culture needs to be developed to ensure organisations are successful. Positive culture helps motivate employess, improves performance and commitment.

If a manager understands the organisation’s corporate culture well, it becomes a powerful tool for achieving objectives, can make it easier to get things done or to initiate a change to routine or procedures, can also be used as a force for positive change

Question 26

List the 4 key management roles

POLC

Answer 26

• planning
• organising
• leading
• controlling

Question 27

Define ‘planning’

Answer 27

Planning is the process of setting objectives and deciding on the methods to achieve them

Question 28

Define strategic planning

Answer 28

Strategic planning is long-term lasting between 2 to 5 years and involves determining where the organisation wants to be in the market and what they want to achieve in relation to their competitors.

Question 29

Define tactical planning

Answer 29

Tactical planning is flexibile, adaptable, medium term planning that usually lasts for 1 to 2 years and assists in implementing the strategic plan.

Question 30

Define operational planning

Answer 30

Operational planning is short term and provides specific details on how the organisation will operate day to day that contributes to achieving short term actions and objectives.

Question 31

Explain the planning process

Answer 31

1. define the objective
2. analyse the environment (using the SWOT analysis)
3. develop alternative strategies
4. implement alternative strategy
5. monitor and seek feedback on the implemented strategy

Question 32

Define a SWOT analysis and explain the main points

Answer 32

A SWOT analysis involves the identifications and analysis of the internal strengths and weakness of the organisation, and the opportunities in, and threat from, the external environment.
Strengths: what is the organisations good at?
Weaknesses: What needs improving?
Opportunities: what is happening in the macro environments that will benefit the organisation?
Threats: what do we need to do to ensure our competitors don’t take our market share?

Question 33

Define ‘organsing’

Answer 33

Organising is the process of arranging resources and tasks to achieve objectives.

Question 34

List the organising process

Answer 34

1. determine the tasks
2. classifying and grouping tasks
3. assigning work and delegating authority

Question 35

Define ‘leading’

Answer 35

Leading is the process of influencing or motivating people to work towards the achievement of the organisation’s objectives.

Question 36

Discuss the leading management qualities

Answer 36

• interpersonal (management’s capacity to deal or liaise with people and build positive relationships with staff)
• informational (involves gathering and communicating or sharing data and knowledge)
• decision making (involves identifying available options and then choosing one course of action from the alternatives)

Question 37

Describe the two types of leading managers

Answer 37

Transactional: provides rewards, incentives in return for their compliance and acceptance of authority, related to performance

Transformational: Inspires or enthuses with vision to ensure they are committed to achieving the objectives of the organisation

Question 38

Define ‘controlling’

Answer 38

Controlling is the process of evaluating performance and taking corrective action to ensure that the set objectives are being achieved.

Question 39

Describe the controlling process

Answer 39

• establishing financial and non-financial standards in line with the objectives
• measuring the performance against benchmarks and standards
• make changes when necessary to ensure objectives are met

Question 40

Define policy

Answer 40

A policy is a set of broad guidelines to be followed by all employees when dealing with important areas of decision making.

• Polices can affect corporate culture by using it to reinforce positive aspects of corporate culture e.g. teamwork and cooperation

Question 41

Define procedure

Answer 41

A procedure is a series of actions enabling a policy to be put into practice. It can also be used to resolve a dispute brought about by a breach of a policy.

Question 42

List the policy development process

Answer 42

1. Identify an issue or problem
2. Research and analyse business environments
3. Consult stakeholders
4. Develop a draft policy for review by stakeholders
5. Revise the policy
6. Approve and distribute the new policy
7. Monitor and evaluate the policy

Question 43

Define ‘Management Structure’

Answer 43

Management structure is a term used to describe the ways in which the management, employees, and resources of an organisation are formally arranged to achieve objectives.