Governance

Question 1

Board of Directors

Answer 1

Board of Directors is to provide strategic direction to the organization and oversight of senior management’s activities.

1) public companies, BOD are elected by shareholders
2) private companies, BOD are chosed by shareholders, or appointed by other BOD members
3) membership professional body, BOD are chosed by members

Question 2

Business ownership

Answer 2

Three types:
1) sole proprietorship
2) partnership
3) corporation

Question 3

Types of organizational structures

Answer 3

Five structures:
1) Simple structure
2) Functional structure
3) Divisional structure
4) Matrix structure
5) Network structure

Question 4

Simple structure

Answer 4

Owner, sold shareholder, or a small group of senior managers make all decisions and communications them to everyone

Advantages: centralized and quick response to changes
decisions consistent / in line with strategic objectives

Disadvantages: employees don’t feel empowered - job dissatisfaction / increased job turnover
not adapt to growing

Question 5

Functional structure

Answer 5

Specialized department are defined and staffed accordingly
Functional managers manage their own responsibilities, and CEO provides general direction and ensure integration

Relatively centralized, but executives and senior managers have some latitude

Advantage: promotes learning and facilitates economies of scale
allows for specialization within sub-structure
provides clear path for individuals to advance their careers - highly motivated

Disadvantage: interdepartmental communication may be limited - cross-functional work team is recommended
loss of control - Top mgmt of each functional group will have difficulty controlling their group, and further delegation is required.

Question 6

Divisional structure

Answer 6

Divisions managed as a separate business and operates automously
Decision is decentralized
For organizations with a variety of products or operates in different locations
Business-level strategies are the domain of divisional managers, corporate strategy is managed by executive team

Advantages: singular focus - higher success rate
stronger internal culture reduces employee turnover - increases efficiencies and divisional profits

Disadvantages: culture of competition
incompatibilities btw divisions due to lack of communication / consultation

Question 7

Maxtrix structure

Answer 7

Functional and business unit structures are combined at same level - two superiors to report (functional and general)

stability of functional structure with flexiblity of a divisional structure - best for complex and chaning environment

Advantages - promotes input from multiple employees - empowered employees and higher employee morale
free communication between employees from various business disciplines - quicker response time for problem solving and implementation of solutions

Disadvantages - multiple lines of communication and unclear chain of command for leadership
conflicting instructions - poor employee morale
more managers than other structures- more expensive
managers compete over employees and waste company resources

Question 8

Network structure

Answer 8

Virtual structure, no office needed

Unstable environment with constant changes, requiring innovation and quick response

Advantage: less overhead expenses
recruiting top talents with less money
Disadvantage: reliant on technology
reliant on workload management

Question 9

Centralized structures

Answer 9

few leaders (usually just one)

Advantages:
1) decisions quick and efficient
2) cheaper to implement

Disadvantages:
1) group think - complacency, stunting future growth and innovation
2) frustrated employee - high turnover

Question 10

Decentralized structures