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 organisational structure

Answer 2

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 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, 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 given more responsibility and often encouraged to take 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 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).