Chapter 3

Question 1

Lan plc trains bankers. It has been established for over 30 years. Lan plc has a large operating core
which consists of all the well-qualified lecturing staff. They need to keep their teaching material
constantly updated to reflect current issues in the complex banking industry, and to ensure that the
company’s courses remain competitive. The lecturers are supported by a large administrative team
which follows procedures to ensure the smooth delivery of courses.
Requirement
Which of the following organisational structures does Lan plc have?
A Entrepreneurial
B Machine bureaucracy
C Professional bureaucracy
D Divisionalised

Answer 1

C - hire specialists who are all imbued with skills and values of the progression

large operating core = professional bure

Question 2

Mintzberg - the 6 components

Answer 2

ideology, strategic apex, middle line, operating core, technostructure, support staff

Question 3

large strategic apex

Answer 3

directional supervision, entrepreneurial

Question 4

large operating core

Answer 4

professional bureacracy - standardised skills

Question 5

large technostructure

Answer 5

machine bureaucracy - standardised processes, functional

Question 6

large middle line

Answer 6

divisional - standardised outputs

Question 7

innovative/adhocracy

Answer 7

large operating core, mutual adjustments, matrix

Question 8

6 Justin works for Edwinstone plc. He is part of a project team developing a large construction site. The
team has a matrix structure with employees from many different departments working on this project.
Requirement
Which of the following basic principles of organisational structure is necessarily contravened by this
type of structure?
A Authority and responsibility
B Subordination of individual interests
C Unity of command
D Division of work

Answer 8

C - employees within a project team have responsibility to more than one superior

Question 9

The Chief Executive of Acton plc has identified problems caused by the centralised nature of the
company’s decision-making processes. These have led to accusations from staff and some customers
that the company is increasingly slow and unresponsive. The Chief Executive wants to increase the
amount of decentralised decision-making over the next year.
Requirement
Which three of the following characteristics of Acton plc are likely to increase the amount of
decentralisation that is possible?
A The authoritarian style of its management
B Its well-skilled workforce
C Its large size
D The slow pace of technological change in its markets
E The effectiveness of communication across the company

Answer 9

A C E

also: technological advancement, geography of locations, local knowledge required, leadership style, size, activity diversification, effectiveness of communication, ability of management

Question 10

Flat organisation

Answer 10

wide span of control (sacrifices control)
lots of delegation
better communication with strategic apex and operating core
cheap - not a lot of admin/OH costs

problem: not enough face-to-face contact

Question 11

Tall organisation

Answer 11

narrow span of control
not a lot of delegation
expensive admin/oh/mgmt costs
slow decision making

Question 12

Organic business

Answer 12

Fast moving environments

Question 13

Mechanistic bureaucracies

Answer 13

Slow moving environments