Lecture 1 - Types Of Organisational Structures And Their Purpose

Question 1

What is an Organisation?

Answer 1

Organised group of people with a particular purpose, such as a business or a government department.

Question 2

Definition of organizational structure

Answer 2

Refers to the formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organisational goals. Determines how roles, power, and responsibilities are assigned, controlled, and coordinated within an organisation, and how information flows between different levels of management.

Question 3

What are organisational structures crucial for establishing?

Answer 3

• clear framework
• setting clear objectives
• employees know their roles and responsibilities
• aligning individual efforts with the company’s overall goals

Question 4

Organisational structures influence on efficiency

Answer 4

Enhances efficiency by streamlining processes, reducing redundancy, and ensuring that the right people are in the right roles.

Question 5

Organisational structures impact on culture and behaviour

Answer 5

Shapes the organizational culture by influencing:
- communication patterns
- decision-making processes
- overall work environment

For example, a rigid hierarchical structure may foster a culture of order and discipline, while a flat structure may promote collaboration and innovation.

Question 6

Organisational structures impact on culture and behaviour

Answer 6

Shapes the organizational culture by influencing:
- communication patterns
- decision-making processes
- overall work environment

For example, a rigid hierarchical structure may foster a culture of order and discipline, while a flat structure may promote collaboration and innovation.

Question 7

What is a Hierarchical structure?

Answer 7

• A traditional model with a clear top-down command chain, authority flows from top management down to the employees. Each employee has a single manager to report to.
• Employees have direct reporting line, and decisions flow from the top down. Communication tends to be formal, following the hierarchy.

Question 8

Hierarchical structure advantages?

Answer 8

• Clarity in Roles
• Career Path
• Centralised Decision-Making

Question 9

Hierarchical structure disadvantages?

Answer 9

• Inflexibility
• Slower Decision-Making
• Potential for Bureaucracy

Question 10

Hierarchical structure impact on decision-making and communication?

Answer 10

• Centralisation of Decisions
• Communication Barriers

Question 11

What is a Flat structure?

Answer 11

• Has few or no middle management levels, with wide span of control, meaning managers oversee a large number of employees. Often used by startups, tech companies, and creative industries, where flexibility and quick decision-making are essential.
• Employees are given more responsibility and often encouraged to take the initiative and make decisions.

Question 12

Flat structure advantages?

Answer 12

• Enhanced Flexibility
• Faster Decision-Making
• Empowerment and Innovation

Question 13

Flat structure disadvantages?

Answer 13

• Management Challenges
• Role Ambiguity

Question 14

Flat structure impact on employee empowerment and innovation?

Answer 14

• Promotes a Collaborative Environment
• Encourages Initiative

Question 15

What is a Matrix structure?

Answer 15

• Employees report to more than one manager, typically a functional manager and a project manager. Common in industries like engineering, construction, and consulting, where projects require input from multiple departments.
• Employees from different departments work together on projects, can lead to more innovative solutions and a more integrated approach to problem-solving.

Question 16

Matrix structure advantages?

Answer 16

• Resource Efficiency
• Improved Communication across Functions
• Flexibility in Project Management

Question 17

Matrix structure disadvantages?

Answer 17

• Complexity in Management
• Potential for Conflicting Priorities
• Higher Demand on Employees

Question 18

What is a For-profit organisation?

Answer 18

Businesses that operate with the primary goal of generating profit for their owners or shareholders.

Question 19

For-profit organisations purpose?

Answer 19

• Maximise financial returns for owners or shareholders.
• Profits are typically reinvested
• Expand market share, improve efficiency, and innovate.

Question 20

Different Organisational Structures in For-Profit Businesses?

Answer 20

• Sole-traders
• Partnerships
• Corporations

Question 21

Sole-trader features?

Answer 21

• Single ownership
• No sharing of profits and loss
• One mans capital
• Unlimited liability
• Less legal formalities
• One mans control

Question 22

Partnership features?

Answer 22

• Owned by two or more individuals who share profits, losses, and management responsibilities.
• Include general partnerships, limited partnerships, and limited liability partnerships (LLPs).
• Partners share liability and decision-making, with profits distributed according to the partnership agreement.

Question 23

Corporation features?

Answer 23

• A legal entity separate from its owners, providing limited liability protection to shareholders.
• Managed by a board of directors and operated by officers, with ownership through shares of stock.
• Corporations have ability to raise capital through the sale of stock and are typically subject to more regulations

Question 24

What is a Not-for-Profit Organisation?

Answer 24

• Entities that operate primarily for a social, educational, charitable, or community purpose rather than for profit generation.
• Profits are reinvested into the organisation to further its mission, rather than being distributed to owners or shareholders.

Question 25

Not-for-Profit organisations purpose?

Answer 25

• Primary purpose is to fulfil a specific mission, such as providing community services, advancing education, promoting advocacy, or supporting a charitable cause.
• Aim to make a positive impact on society rather than focusing on financial gains.
• Often rely on donations, grants, and fundraising efforts to support their activities.

Question 26

Different Organisational Structures in Not-for-Profit Businesses?

Answer 26

• Charities
• Non-governmental organisations
• Social enterprises

Question 27

Charities features?

Answer 27

• Organisations that focus on philanthropic goals, such as aiding the poor, advancing education, or promoting health.
• Often governed by a board of trustees and rely heavily on donations and volunteer work.

Question 28

Non-governmental organisations features?

Answer 28

• Independent organisations that operate internationally or locally to address social, environmental, or political issues.
• Structured to maintain independence from government control, with funding from private donors, governments, or other NGOs.
• E.g Amnesty International, World Wildlife Fund (WWF), and Doctors Without Borders.

Question 29

Social enterprises features?

Answer 29

• Organisations that apply commercial strategies to maximise improvements in human and environmental well-being.
• Often generate revenue through the sale of goods or services, with profits reinvested into their social mission.
• E.g TOMS Shoes (donates a pair of shoes for every pair sold) and Warby Parker (provides glasses to those in need).