Chapter 3 - Organisational and Business structures Flashcards
What is organisational structure?
Formed by grouping people into departments/sections and the allocation of responsibility and authority, sets out how various functions are formally arranged
What are the intentions of organisational structure?
Link individuals
Allocate tasks
Delegate authority
Co-ordinate objectives and activities
Facilitate flow of work
What are Mintzberg’s 6 building blocks(SOMSIT)?
Operating core - directly involved in the process turning inputs into outputs
Middle line - conveys the goals set by strategic apex and controls work of operating core in pursuit of goals
Strategic Apex - ensures organisation follows its mission.
Support staff - ancillary services, don’t plan and function independently of the operating core
Technostructure - analysts determine and standardise work processes and techniques, planners outputs and personnel analysts standardise skills.
Ideology - values, beliefs and traditions (overarching)
What principles are hierarchies based upon(UCAUSED)?
Division of work - allocated rationally
Scalar chain - authority flows vertically down a clear chain of command from highest to lowest
Correspondence of authority and responsibility - holder of an office should have enough authority to carry out responsibilities
Appropriate centralisation - decisions taken at the top when appropriate
Unity of command - subordinate should recieve orders from one boss only
Unity of direction - one head and one plan per activity
Equity - organisational policies should be just
What values do modern management theorists emphasise?
Multi-skilling
Flexibility
What are the advantages and disadvantages of the simple/entrepreneurial structure?
Advantages:
Quick decisions
Goal congruence
Flexible
Disadvantages:
Expansion limited
Diversification difficult to cope with
Lack of career structure
What are the pros and cons of the functional/bureaucratic structure?
Pros:
Good career opportunities
Efficient
Exploits specialist functional skills
Cons:
Rigid structure
Unsuitable for growth and diversification
Poor/slow decisions
What are the pros and cons of a divisional structure?
Pros:
Flexible in adapting to growth and diversification
Good development of managers
Reduces numbers of levels of management
Cons:
Disputes over allocation of central costs
What is divisionalisation?
Division of business into autonomous regions (geographic) or product businesses (product/brand), each with its own revenues, expenditures etc
What conditions need to be met for divisionalisation to be successful?
Each division must have:
Properly delegated authority
Large enough to support management
Not rely on head office
potential for growth
Scope and challenge
What are the features of the matrix structure?
Formalises vertical and lateral lines of communication
Managers appointed for projects/customers
Temporary
What industries is the matrix structure most suitable to?
Complex/hi-tech industries
Education
R&D
What are the pros and cons of the matrix structure?
Pros:
Reflects importance of project/customer
Co-ordination of technology
Cons:
Conflicting demands on staff time
Conflicting demands over allocation of other resources
Dilution of authority of functional heads
What is a centralised organisation?
Decision making authority is concentrated in the strategic apex
What factors affect the amount of decentralisation in a business?
Leadership style
Size of organisation
Local knowledge needed
Geography of locations
Technological advancement
Ability of management
Effectiveess of communication
Activity diversification
What are the pros of centralisation?
Decisions easier to co-ordinate
Senior managers keep control
Better quality of decisions
Potentially cheaper
Crisis decisions taken quicker
What are the pros of decentralisation?
Avoids overburdening top managers
Improves motivation of juniors
Greater awareness of local problems
Greater speed of decision making
