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chapter 9 Flashcards

1
Q

Developing structure requires consideration of three areas - what are they?

A

Organisational configuration

Centralisation/Decentralisation

Management sysmtes (inc make up of senior management team, processes to monitor financial results, to arrive at decisions and manage risks)

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2
Q

What is defined
how the various functions of an organisation are formally arranged into departments or sections, and how responsibility and authority are allocated

A

Organisational Structure

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3
Q

Structure following strategy is what kind of approach

A

top down
Structure of organisation must be adapted to fit the strategy adopted by management

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4
Q

Organisational structure changes response to stage of Growth Chandler
Geographic expansion calls for

A

departmental offices set up to administer new field units

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5
Q

Organisational structure changes response to stage of Growth Chandler
vertical integration

A

central office and multi-departmental structure

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6
Q

Organisational structure changes response to stage of Growth Chandler
diversification required

A

general office to administer divisions operating in different industires

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7
Q

Bottom up view of strategy and structure

A

strategy follows, emerges from, depends or structure or structure limits the choice of strategy

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8
Q

Bottom up view
Organisational structure and interests and inforamtion

A

structure shapes the flow of information to those responsible for strategic management

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9
Q

bottom up view
power

A

what actually gets don depends on power

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10
Q

bottom up view
Highly centralised structures - what do they tend to do

A

stifle innovative strategic solutions

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11
Q

bottom up view
Divisionalised structures - what do they restrict

A

collaboration and joined up strategies

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12
Q

bottom up view
what go bureaucratic structures do

A

focus on maintaining status quo

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13
Q

Different views on strategy and structure

A

top down - strategy sets structure
bottom up - structure sets strategy
contingency - no one best structure and best depends on situation

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14
Q

Both bottom up and top down at work
restructure to

A

implement new strategies

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15
Q

Both bottom up and top down at work
strategies partly unrealised due to

A

structure working against them

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16
Q

Both bottom up and top down at work
structures develop organically as

A

teams and managers adapt to new challenges and initiatives

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17
Q

Both bottom up and top down at work
restructuring creates

A

new initiatives and possibilities at the same time as suppressing others

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18
Q

What is the modern contingency approach

A

no best universal structure, lots of variables influencing design and performance. Emphasis on need for flexibility

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19
Q

Contingency - if then

A

if certain situational factors are present, then certain aspects of structure are most appropriate

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20
Q

Contingency approach
types of situational factors

A

Type and size of organisation
purpose
culture
history
tech
environemtn
top management preference
skills ability needs motivation of employees

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21
Q

Burns and Stalker - extreme types of structure and style - what are they

A

mechanistic and organi

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22
Q

What is a mechanistic structure

A

rigid
bureaucratic management
stable environments

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23
Q

What is an organic structure

A

more fluid appropriate to changing circumstances

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24
Q

Mintzberg suggested all organisation can be analysed into five building blocks - what are they

A

strategic apex
middle line
operating core
technostructure
operating core

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25
Q

Mintzberg - what does structure depend on

A

which building block is more dominant

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26
Q

What is strategic apex

A

responsible to owners and wants to retain control over decision making

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27
Q

What is technostructure

A

analysts, reason for existence is design of procedures and standards and wants standardised, highly regulated enviornmetn

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28
Q

What is the operating core

A

members that work directly on the product or service. Working autonomously and achieve what other coordination is necessary by mutual adjustment

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29
Q

What is the middle line

A

middle managers

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30
Q

What do middle line want

A

to increase control over operating core

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31
Q

When do support staff gain influence

A

when their experience is vital

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32
Q

What does the strategic apex want

A

retain control over decision making

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33
Q

What do technostructure want

A

environment that is standardised and highly regulated

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34
Q

What is the key building block in a simple structure/entrepreneurial

A

strategic apex

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35
Q

What is the key building block in a machine bureaucracy / functional structure

A

techno structure

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36
Q

What is the key building block in a
professional bureaucracy

A

operating core

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37
Q

What is the key building block in a
divisionalised

A

middle line

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38
Q

What is the key building block in a
adhocracy/innovative/matrix

A

operating core

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39
Q

What is the environment for
a simple structure

A

simple dynamic

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40
Q

What is the environment for
machine bureaucracy / functional

A

simple static

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41
Q

What is the environment for
professional bureaucracy

A

complex static

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42
Q

What is the environment for
divisionalised

A

simple static diverse

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43
Q

What is the environment for
adhocracy/innovative matrix

A

complex dynamic

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44
Q

Internal factors for
simple structure/entrepreneurial

A

small
young
simple tasks

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45
Q

Internal factors for
machine bureaucracy/functional

A

large
old
regulated

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46
Q

Internal factors for
professional bureaucracy

A

professional simple system

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47
Q

Internal factors for
Divisionalised

A

Very large
old
divisible tasks

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48
Q

Internal factors for
adhocracy/innovative (matrix)

A

young
complex tasks

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49
Q

Key coordinating mechanism of
simple structure

A

direct supervision

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50
Q

Key coordinating mechanism of
Machine bureaucracy/functional

A

standardisation of work

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51
Q

Key coordinating mechanism of
Professional bureaucracy

A

standardisation of skills

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52
Q

Key coordinating mechanism of
divisionalised

A

standardisation of outputs

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53
Q

Key coordinating mechanism of
Adhocracy/innovative (matrix)

A

mutual adjustment

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54
Q

Four structures suggested by mintzberg

A

entrepreneurial
functional
divisionalised
matrix

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55
Q

An entrepreneurial / simple structure is typically a

A

single owner manager in a small business

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56
Q

Benefits of entrepreneurial / simple structure

A

flexible,
quick to adapt to change

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57
Q

Issue with entrepreneurial structure

A

dependent on entrepreneur
limited in ability to come with expansion
not expert in everything

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58
Q

Functional structure explained

A

departments defined by functions (work that they do)

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59
Q

Benefits of functional structure

A

more efficient
benefit from economies of scale

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60
Q

Issues with functional structure

A

conflict
bureaucracy hamper cross functional innovation and creativity
rigid - unsuitable for change environments

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61
Q

Divisional structure expalined

A

business divided into autonomous units based on geography, product or market.

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62
Q

Divisionalised structure
benefits

A

adapted for growth and diversification, better suited to large diversified business

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63
Q

Benefits of geographic divisionalisation

A

Better, quicker local decision making
May be less costly to establish area factories
May be essential of o/s to cope with different environemtns

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64
Q

Disadvantages of geographic divisionalisation

A

duplication of management effort
Struggles to cope with large clients who span divisions

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65
Q

What is product divisionalisation

A

elements are grouped by product or product line. some functional divisionalisation remains.

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66
Q

Advantages of a product/brand divisionalised structure

A

individual managers held accountable for profitability of products

specialisation developed

different functional activities required for each product can be coordinated and integrated

focussed on how business makes product

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67
Q

Disadvantage of product divisionalisation

A

Increases overhead costs and managerial complexity of organisation

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68
Q

What is a matrix organisation

A

formalisation of management control between different functions, whilst maintaining functional divisionalisation

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69
Q

Advantages of a matrix structure

A

More flexible (people, tasks and structure)

Improved communication

Multiple orientation - functional specialists do not get wrapped up in their own concerns

structure for allocating responsibility to managers for end results

Inter-disciplinary cooperation, mix of skills and expertise

geographic areas with distinct need served, EOS maintained

70
Q

Disadvantage of matrix structure

A

Dual authority can lead to conflict between managers

Role stress with two bosses

more costly

difficult for management to accept

slower decision making - requires consensus and agreement

71
Q

Define span of control

A

number of subordinates reporting to one person - influences shape of organisation

72
Q

Factors influencing span of control
Location of subordinates

A

More widely spread - fewer that can be managed effectively

73
Q

Factors influencing span of control
complexity / nature of work

A

as more complex, span decreases

74
Q

Factors influencing span of control
management personality and ability

A

better managers can manage more people

75
Q

Factors influencing span of control
Subordinate ability

A

better they are, more they can be delegated and managed by the manager

76
Q

Factors influencing span of control
Level of organisational support

A

personnel departments remove routine tasks from manager, they can manage more people

77
Q

Factors influencing span of control
level of ‘danger’ if delegation takes place

A

more danger, less people that can be managed

78
Q

Issues setting span of control wrong
too wide/flat

A

loss of contact

loss of control

subgroups form with unofficial leaders

79
Q

Issues setting span of control wrong
too narrow/tall

A

Too many management levels and too much cost

delays in decision making

over supervision and demoralised staff

80
Q

How can IT impact structure

A

new patterns of work

form and structure of groups

supervisory roles

change in lines of authority

job design/descriptions

centralised/decentralised decision making

81
Q

What has IT led to in terms of structure

A

flatter structures, wider spans, fewer levels of management

82
Q

What do flexible structures allow firms to do

A

adapt to changing circumstances

83
Q

what is a boundary less organisation

A

structured to make it easier to collaborate with external parties, remove internal barriers existing between different functions

84
Q

Focus of boundary less organisations

A

creation of relationships with external groups

85
Q

What is central to creation of boundary-less organisations

A

increased outsourcing

establishing virtual communication networks facilitated by internet technologies

86
Q

What are examples of boundary less organisations

A

network
virtual
hollow
modular

87
Q

Where is network approach visible

A

outsourcing as strategic method.

88
Q

What are virtual teams

A

connected groups of people who may not be in same office/organisation but

share information and tasks

make joint decisions

fulfil collaborative function of a team

89
Q

How can oraganisations structure differently
Staffing

A

certain areas are undertaken by freelance/contract - shamrock

90
Q

Organisation structure activities differently
leasing

A

leasing of machinery, IT and accommodation more common

91
Q

Organisations able to structure activities differently
production

A

May be outsourced even offshore where labour is chpeaer

92
Q

Organisations able to structure activities differently
Interdependence

A

emphasised by sharing functions and service, database and communication share and access common data

93
Q

Network structures co-operation and non-core competence matters can lead to benefits including

A

cost reduction
increased market penetration
experience curve effects

94
Q

Virtual organisations considerations

A

home working
customers and suppliers - virtual teams

95
Q

What are hollow organisations

A

use outsourcing effectively so the organisation is hollowed out. Anything non-essential is outsourced out

96
Q

What is a modular organisation

A

separate production processes into individual modules,

activities undertaken are then outsourced to a number of different specialist parties

which become responsible for producing one aspect used in overall process

97
Q

Benefit of modular organisation

A

reduce cost
gain access to specialist skills that would take time to develop in house

98
Q

What is Handy’s Shamrock

A

core of essential executives and workers,

supported by outside contractors and part time help

99
Q

Shamrock is also known as

A

flexible firm

100
Q

elements in shamrock

A

professional core
flexible labour force
contractual fringe
customers

101
Q

Shamrock
what is the professional core

A

permanently employed staff providing core competencies and distinctive knowledge base of the organisation

102
Q

What is the flexible labour force

A

temporary and part time workers who can be deployed for peaks in demand

103
Q

Handy’s Shamrock, what is the contractual fringe

A

external providers who can undertake non-core activities,

provide specialist services

more economically than the organisation could arrange internally
(outsourcing)

104
Q

Shamrock - customers

A

organisation may be able to ‘sub contract’ some tasks, IT allowed sales service and supply

105
Q

When is an organisation centralised

A

decision making authority concentrated on strategic apex

106
Q

Decentralisation defined

A

ability to make decisions is passed down to lower levels of hierarchy

107
Q

Factors affecting decentralisation

A

management style

size

extent of activity diversification

effectiveness of communication

ability of management

speed of tech advancement

geography

extent of local knowledge required

108
Q

Factors affecting decentralisation
Management style

A

authoritarian = centralised

109
Q

Factors affecting decentralisation
size

A

size increase, decentralisation tends to

110
Q

Factors affecting decentralisation
extent of activity diversification

A

more diversified, more decentralised

111
Q

Factors affecting decentralisation
effectiveness of communication

A

decentralisation doesn’t work if information is not communicated downards

112
Q

Factors affecting decentralisation
ability of management

A

more able, more decentralised

113
Q

Factors affecting decentralisation
speed of tech advancement

A

lower managers more familiar with changing tech

therefore decentralise

114
Q

Factors affecting decentralisation
Geography

A

if spread, decentralise

115
Q

Factors affecting decentralisation
extent of local knowledge needed

A

if required, decentralise

116
Q

Advantages of decentralisation

A

senior management free to concentrate on strategy

motivation for lower managers

local expertise improves decisions

quicker and more effective responses to local conditions

career paths for managers/employees

117
Q

disadvantages of decentralisation

A

more difficult to coordinate as lots making decisions

incongruent decisions

loss of control

complicated structure

transfer pricing

evaluating performance difficult

duplication of some roles

118
Q

Risk of products all being in the same stage of development

A

may all decline together

119
Q

Mix of portfolio - what does a business need

A

mix of yesterday, today and future products

range of products with different lifecycles

products in development

lots in maturity to support others

120
Q

When assessing product portfolio consider

A

stage of lifecycle

remaining life

urgency of developing new

whether lifecycle can be extended

121
Q

BCG can be applied to

A

individual products
whole strategic business units

122
Q

Axis on BCG

A

Market attractiveness (rate of growth)

Market strength (relative market share)

123
Q

High share of a high growth market is a

A

star

124
Q

stars require in the short term

A

capital expenditure in excess of cash generated to maintain position,

but promise him return in future

125
Q

high growth rates will attract

A

competition

126
Q

BCG - Cash cows require capital expenditure

A

very little expenditure

generate high cash returns

income can be used to finance stars

127
Q

Low growth rate makes attacks by new firms

A

unlikley

128
Q

Question marks
capital expenditure

A

Decision - considerable expenditure to build into star, usually poor cash generators and show negative cash flow

129
Q

Dogs should be

A

allowed to die or should be killed off

130
Q

Dogs and cashflow

A

modest outflow or inflow

cash trap - will tie up resources

131
Q

When can dogs be a valid part of product portfolio

A

complete range

fill niche market

132
Q

What are infant products

A

in early stage of development

133
Q

What are war horse products

A

products that were cash cows

still making good sales and earning good profits

134
Q

What are cash dogs

A

dogs that are generating cows

135
Q

What are dodos

A

low share low growth losing cash

136
Q

Product lifecycle stages

A

introduction
growth
shakeout
maturity
decline

137
Q

BCG and Product lifecycle
Introduction

A

Infants

negative cash flow

138
Q

BCG and Product lifecycle
Growth

A

Stars and question marks

139
Q

BCG and Product lifecycle
Maturity

A

Cash cow and dogs

140
Q

BCG and Product lifecycle
decline

A

war horses

dodos

141
Q

BCG Matrix benefits

A

framework for planners to consider and forecast growth

evaluate competitive dimension

142
Q

BCG issues

A

Does not consider other factors

ROCE/EPS used for investors, stars and question marks look bad

No insight how to compare opportunities when considering which to allocate resources to

Rates of profit can be very high for small businesses

Doesn’t consider risk

Focussed on known markets and products, rational planning and positioning approach

assumes industry and markets can be defined, ignores substitutes

difficult forecasting growth

143
Q

Issues in portfolio planning

A

Models simple

BCG ignores risk

ignore opportunities for creative segmentation or identifying New niche

Rely on identifiable products rather than services

ignore profit generating capability

does not increase share price when diversified portfolio (investors can od)

Cash cow flow into question mark - ignores paying out dividend

may cause business to move beyond core competences

144
Q

Considerations for successful divisionalisation three

A

autonomy
controllability
corporate optimality

145
Q

Divisons can be

A

revenue centres
cost centres
profit centres
investment centres

146
Q

Investment centres responsible for

A

balance sheet and profit

147
Q

Profit centres responsible for

A

revenue and cost

148
Q

Cost centres responsible for

A

keeping cost in limit

149
Q

Revenue centres only responsible for

A

revenes

150
Q

Implication of transfer pricing

A

determine profit

affect performance evaluation

determine tax

determine currency of profits

may determine price and final sales

can lead to dysfunctional decisions

151
Q

Three cost based methods of setting

A

Full cost
Variable cost
opportunity cost

152
Q

Cost based optimal transfer price

A

higher of VC and opportunity cost

153
Q

Other methods of transfer pricing

A

negotiated

two part

dual

154
Q

Negotiated transfer price

A

price established by discussions between divisional managers in bargaining process

155
Q

Two part transfer prices

A

transfer price set at VC to ensure corporate optimality

supplying division records extra amount to arrive at profit figure

156
Q

Dual pricing transfer pricing

A

receiver at standard VC

Transferer at higher value to give profit incentive

157
Q

Dual transfer pricing outcome

A

Goal congruence

poor cost control

158
Q

Considerations for TP

A

Impact on group profitability

impact on product positioning

costs of the system

motivational impacts of the system

159
Q

Bartlett and Ghoshal four structures depends on

A

local independence/responsiveness

global coordination

160
Q

Bartlett and Ghosal four structurse

A

international division

local sub

global product division

transnational appraoch

161
Q

High global coordination, low local independence

A

global product dvision

162
Q

Low global coordination
low local independence

A

international division

163
Q

High global coordination, high local independence

A

transnational corporation

164
Q

Low global coordination
high local independence

A

local sub

165
Q

What is an international division

A

stand alone division added to domestic structure,

drawing on products and tech of home business

166
Q

What is a local subsidiary

A

Based and operated independently.

Local management has a high degree of autonomy

167
Q

When is local sub appropriate

A

business following multi domestic strategy

168
Q

What is a global product division

A

Typical for company following global strategy

with separate ww division for different products

169
Q

What is the transnational approach

A

high local responsiveness and high global coordination

strategic and organisational flexibility

like a matrix

170
Q

What does the TNC do

A

Coordinate various stages of production chain between countries

take advantage of diffecnes in geographical distribution

has geographical flexility

171
Q
A

bst (10 decks)

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