Chater 11 - Management Activities 2: Organising

Question 1

What is organizing?

Answer 1

Organizing occurs when the manager co ordinates all business resources e.g. employees, capital, and raw materials into the most effective formation to achieve organizational goals

Question 2

What are the four types of organizational structures?

Answer 2

1. Functional
2. Geographic
3. Product
4. Matrix/team based

Question 3

What is a functional organizational structure?

Answer 3

• firm divided into departments based on the functions they perform e.g. finance, marketing
• each departments has a manager who is responsible for achieving the department goal.

Question 4

Name and explain 3 advantages of a functional organizational structure.

Answer 4

1. Employee motivation - they see that there is a promotional path, this means they work harder to gain more skills so that one day they will be promoted
2. Expert knowledge - it allows employees to become experts in the department which improves productivity as employees can complete their tasks faster and more efficiently
3. Responsibility - employees know who is responsible for what jobs in the firm and to whom their queries and concerns should be directed

Question 5

Name and explain 3 disadvantages to a functional organizational structure.

Answer 5

1. Focus on departmental goals - employees may work towards departmental goal objectives rather than the overall business goals.
2. Slow communication - communication can be slow between departments. This means the business is slow to react to change
3. Lack of teamwork - there may be a lack of trust between employees working in cross departmental teams. This reduces productivity in the firm.

Question 6

What is a geographic organizational structure?

Answer 6

The business is divided into geographical areas e.g. based on region or country.

Question 7

Name and explain 3 advantages of a geographic organizational structure.

Answer 7

1. Local managers - they provide local consumers with products that satisfy their needs. increases consumer loyalty.
2. friendly competition - friendly competition between geographical units. they try to outdo each other, this increases sales and profits.
3. promotion - managers make decisions on behalf of their region which prepares them for future promotion opportunities.

Question 8

Name and explain 3 disadvantages of a geographical organisational structure.

Answer 8

1. Duplication of work - employees doing the same work in different regions, increases business costs.
2. Conflict between management - decisions made by senior managers may have negative impacts on regions e.g. redundancies. can lead to industrial conflicts
3. communication - poor communication between different geographical units, can result in organisational inefficiency.

Question 9

What is a product organisational structure?

Answer 9

business is divided into units based on the type of product it provides to consumers

Question 10

Name and explain 3 advantages of a product organisational structure.

Answer 10

1. Consumer demand - can meet cnsumer needs more efficiently as it is focused on one product.
2. Monitor product performance - monitor profit and performance of each product. allows them to know if they need to discontinue something or promote it more
3. Expert knowledge - employees can develop expert knowledge in their division. means they can give a higher level of customer service to customers

Question 11

Name and explain 3 disadvantages of a product organisational structure.

Answer 11

1. Duplication - people in different units doing the same job. increases business costs
2. Product competition - rivalry between units as some products may be in direct competition with each other
3. poor communication - poor communications between the product units may result in the business missing opportunities in the market.

Question 12

What is a matrix organisational structure?

Answer 12

• mixture of functional organisational structure and team based structure
• employees work in various departments and come together to work in teams to complete business projects
• employees report to both their department manager and their team manager

Question 13

Name and explain 3 advantages of a matrix organisational structure.

Answer 13

1. Increased motivation - employees feel valued and this motivates them to work harder so they dont let their team down.
2. Improved communication - working with employees from different departments improves communication within the business, allows them to work towards common goals
3. Improved decision making - team members have a wide variety of skills and experience, this leads to better quality decisions

Question 14

Name and explain 3 disadvantages of a matrix organisational structure.

Answer 14

1. Multiple managers - employees may receive conflicting instructions from their managers. they may struggle to decide which orders to prioritize
2. Training costs - employees need extra training in areas such as teamwork and communication. training programs increase business costs
3. Lack of trust - may take longer for the team to become productive as there may be a lack of trust between employees from different parts of the firm

Question 15

What is span of control?

Answer 15

relates to the number of employees who report to a manager

Question 16

What are the 2 types of span of control?

Answer 16

wide or narrow

Question 17

What is a wide span of control?

Answer 17

when a large number of employees report to the manager. happens when employees dont need a lot of supervision e.g. office cleaners / factory workers

Question 18

What is a narrow span of control?

Answer 18

when a small number of employees report directly to the manager. is used when employees require greater supervision e.g. doctors / miners

Question 19

What are the 3 factors that effect choosing an organisational structure?

Answer 19

1. Consumer demand - product or geographical structure if there is a high demand as it allows the business to react quicker to changes in consumer taste
2. Specialization - allows the employees to become experts in a particular area e.g. functional structure for marketing
3. Intrapreneurship - matrix organisation if they want employees to develop new products and processes for the firm

Question 20

What are the 4 factors affecting the span of control?

Answer 20

1. Trust - high level of trust means wider span of control
2. Employee skills - more experienced requires less supervision so it means a wider span of control
3. Tasks - employees performing repetitive tasks requires less supervision
4. Managerial workload - a manager with a large workload will need to have a narrow span of control

Question 21

What are the 5 levels of an organisational structure?

Answer 21

from top to bottom

• shareholders
• board of directors
• senior management (ceo)
• middle management (marketing manager)
• front line staff (marketing assistant)

Question 22

What is delayering?

Answer 22

taking out layers of management,. increases span of control for managers

Question 23

What are 2 advantages of delayering?

Answer 23

1. Improved communication - messages pass through fewer levels which means its quicker
2. Reduced costs - removing layers of managers means less employees to pay

Question 24

What are 2 disadvantages of delayering?

Answer 24

1. Decreased motivation - employees fear their job security, can reduce motivation and lead to decreased productivity
2. Managerial span of control - wider span of control means increased workloads for managers