Chapter 41- Organisation

Question 1

What is an organisational chart?

Answer 1

A diagram that shows the hierarchy in a business (how a business is organised).

Question 2

What are the key concepts related to the organisation of a business?

Answer 2

• Types of hierarchy
• Span of control
• Communication
• Line management
• Chain of command
• Accountability

Question 3

Span of control

Answer 3

Number of employees for whom a manager is responsible for.
(best=4/5)

Question 4

Why does it suggest that the best span of control is 4/5?

Answer 4

Because as the number of span of control increases, the number of channels of communication increases so effective communication may break down.

Question 5

What happens if a small span of control is required?

Answer 5

The number of layers in the hierarchy will increase meaning more layers for communication to pass through so effective communication less likely.

Question 6

In the span of control, what factors influence how many people are involved?

Answer 6

• Size of business
• Skill/ experience of employee
• Personality of manager

Question 7

Chain of command

Answer 7

Concerned with the way in which responsibility for employees is organised within a business.

Question 8

Levels of hierarchy

Answer 8

Refers to the number of layers in a business organisation
- horizontal flat structure will have fewer levels than a vertical/ tall structure.

Question 9

What is delayering?

Answer 9

Reducing the number of levels in the hierarchy of an organisation.

Question 10

Advantages of delayering

Answer 10

• provides opportunities for employees to have more responsibility (encourage motivation)
• decision- making process is quicker

Question 11

Disadvantages of delayering

Answer 11

• Span of control will increase
• Short term- implications for costs as redundancies may be necessary to achieve delayering (demotivate employees as fearful of losing job- reduce sense of security (maslow)

Question 12

Delegation

Answer 12

The more delegation there is, the bigger the span of control and the wider the organisational structure.

Question 13

What factors influence how much delegation takes place?

Answer 13

• Leadership style (democratic style (more) )
• how busy the manager is (very busy= more)
• Ability and willingness of employees to take on additional responsibility.

Question 14

Empowerment

Answer 14

Giving employees responsibility for the tasks they perform

Question 15

Empowerment advantages

Answer 15

• employees more motivated
• give business an opportunity to reduce the number of levels in its structure (delayering).

Question 16

Profit centre

Answer 16

Business is organised around recognisable individual products

Question 17

How does organisation by product seem a sensible way to organise ?

Answer 17

• Easier to see which products are doing well.
• Managers of each product can concentrate on their energies on one product rather than several.

Question 18

Drawbacks of profit centres

Answer 18

• Different products compete for resources- leading to conflict
• Resources may be wasted.

Question 19

Organistic (horizontal/ flat) structure

Answer 19

• Large span of control
• Democratic style of leadership
• Delegation is encouraged (motivated workforce)

Question 20

Mechanistic (vertical/ tall) structure

Answer 20

• Smaller span of control
• Less democratic style of leadership
• More bureaucratic

Question 21

Who classified organisations as either centralised or decentralised?

Answer 21

Weinshall

Question 22

Centralised structure

Answer 22

• Associated with autocratic leader
• Leader involved with everything and communication goes through them
• Decision making process takes place at the top of the hierarchy.

Question 23

Decentralised structure

Answer 23

• Decision making process can take place away from head office
• Span of control (wide)
• Democratic

Question 24

Advantages of a centralised structure

Answer 24

• Decisions are quicker as there is no need to consult all areas.
• Strong leadership
• Standardised approach in how it’s operated

Question 25

Disadvantages of a centralised structure

Answer 25

• Decisions are made without the benefit of local knowledge
• Lack of involvement (demotivation)
• Experts in region may be ignored resulting in mistakes.

Question 26

Advantages of a decentralised structure

Answer 26

• Bring able to make decisions is a motivator
• Less time spent on communication
• More flexible approach as decisions are to be made for individual areas.

Question 27

Disadvantages of a decentralised structure

Answer 27

• Decision may not be appropriate for the business as a whole

Question 28

Matrix organisational structure

Answer 28

It’s where employees with similar skills are put together to complete tasks but with more than one manager supervising

Question 29

Organisational culture

Answer 29

Reflects the values, attitudes and beliefs of a business

Question 30

Main components of a good organisational culture

Answer 30

• Vision- Starting with a mission statement
• Values- Values of a business
• Practices- Acting and operating in a way to match values
  People- Employees who share values of the business
  Place- location

Question 31

How can organisational culture be seen?

Answer 31

• How the employees dress
• How the building is designed
• The degree of training offered