Operational and Business Structures Flashcards
1
Q
Define organisational structure
A
The grouping of people into departments or sections and the allocation of responsibility and authority
2
Q
Which of Fayrol’s fourteen rules of managerial conduct are relevant to structure?
A
DUUCS
- Division of work
- Unity of command
- Unity of direction
- Centralisation
- Scalar chain
3
Q
Define division of work
A
To improve practice and familiarity and become specialised
4
Q
Define unity of command
A
Each subordinate answerable to only one superior
5
Q
Define unity of direction
A
Only a single head and plan for a set of activities
6
Q
Define scalar chain
A
Lines of authority should exist from the top to the bottom of the organisation
7
Q
What are the two modern principles?
A
- Multi-skilling
2. Flexibility
8
Q
What are the benefits of multi-skilling?
A
Enables labour and other resources to be used more efficiently
9
Q
What are the benefits of flexibility?
A
Enables companies to respond quickly to changing market conditions
10
Q
Define multi-skilling
A
Teams where individuals are trained to perform a variety of different tasks
11
Q
Define flexibility
A
Flexible working hours, matrix structure and temporary project teams
12
Q
How can organisational structure be communicated?
A
- Organisational charts
- Organisational manuals
- Job descriptions
13
Q
What are Mintzberg’s building blocks and coordinating components?
A
- Operating core
- Strategic apex
- Middle line
- Technostructure
- Support structure
- Ideology
14
Q
Define operating core
A
The basic work of the organisation
15
Q
Define strategic apex
A
Higher management
16
Q
Define middle line
A
Managers linking between the strategic apex and operating core
17
Q
Define technostructure
A
Role is to design procedures and standards; e.g accountants, computer specialists, engineers
18
Q
Define support structure
A
Provision of services to the organisation which support operations and production
19
Q
Define ideology
A
Organisation’s values and beliefs
20
Q
Define Mintzberg’s coordinating mechanisms
A
Considers how the building blocks are integrated into a cohesive unit
21
Q
Define Mintzberg’s building blocks and coordinating components
A
Considers how any organisation can be analysed into six building blocks and how these are co-ordinated
22
Q
What are Mintzberg’s coordinating mechanisms?
A
- Mutual adjustment
- Direct supervision
- Standardisation of work processes
- Standardisation of outputs
- Standardisation of skills and knowledge
- Standardisation of norms
23
Q
Define mutual adjustment
A
Coordination through informal contact
24
Q
Define direct supervision
A
Hierarchy
25
Define standardisation of work processes
Specified operating procedures
26
Define standardisation of outputs
Product and service specifications
27
Define standardisation of skills and knowledge
Identifies training needed and necessary skills base to do work
28
Define standardisation of norms
Culture
29
What is the environment of a simple structure configuration?
1. Simple
| 2. Dynamic
30
What are the internal factors of a simple structure configuration?
1. Small
2. Young
3. Simple tasks
31
What is the key building block of a simple structure configuration?
Strategic apex
32
What is the key coordinating mechanism of a simple structure configuration?
Direct supervision
33
What is the environment of a machine bureaucracy configuration?
1. Complex
| 2. Static
34
What are the internal factors of a machine bureaucracy configuration?
1. Large
2. Old
3. Regulated tasks
35
What is the key building block of a machine bureaucracy configuration?
Techno structure
36
What is the key coordinating mechanism of a machine bureaucracy configuration?
Standardisation of work
37
What is the environment of a professional bureaucracy configuration?
1. Complex
| 2. Static
38
What are the internal factors of a professional bureaucracy configuration?
1. Professional
| 2. Simple systems
39
What is the key building block of a professional bureaucracy configuration?
Operating core
40
What is the key coordinating mechanism of a professional bureaucracy configuration?
Standardisation of skills
41
What is the environment of a divisionalised configuration?
1. Simple
2. Static
3. Diverse
42
What are the internal factors of a divisionalised configuration?
1. Very large
2. Old
3. Divisible tasks
43
What is the key building block of a divisionalised configuration?
Middle line
44
What is the key coordinating mechanism of a divisionalised configuration?
Standardisation of outputs
45
What is the environment of an adhocracy/innovative configuration?
1. Complex
| 2. Dynamic
46
What are the internal factors of an adhocracy/innovative configuration?
1. Young
| 2. Complex tasks
47
What are the key building blocks of an adhocracy/innovative configuration?
1. Operating core
| 2. Support staff
48
What is the key coordinating mechanism of an adhocracy/innovative configuration
Mutual adjustment
49
Define Mintzberg's main configurations
Combination of building blocks and coordinating mechanisms
50
What are Mintzberg's main configurations?
1. Simple structure
2. Machine bureaucracy
3. Professional bureaucracy
4. Divisionalised
5. Adhocracy/innovative
51
What are the features of the entrepreneurial structure?
1. The structure is built around the owner-manager
| 2. The structure is totally centralised with all key decisions being made by the strategic leader
52
What are the advantages of an entrepreneurial structure?
1. Fast decision making
2. More responsive to the market
3. Good control
4. Close bond to the workforce
53
What are the disadvantages of an entrepreneurial structure?
1. Lack of career structure
2. Maybe too centralised
3. Cannot cope with diversification
5. Cannot cope with growth
54
What are the features of the functional structure?
1. Common in organisations that have outgrown the entrepreneurial structure and need to organise the business on a functional basis
2. Most appropriate to smaller companies with few products and locations and which exist in a relatively stable environment
55
What is the hierarchy in a functional structure?
Board of directors above the marketing department, production department, finance department, and HR department
56
What is the hierarchy of an entrepreneurial structure?
Manager above subordinates
57
What are the advantages of a functional structure?
1. Economies of scale
2. Standardisation
3. Efficiency
4. Specialists more comfortable
58
What are the disadvantages of a functional structure?
1. Empire building
2. Slow to adapt to market changes
3. Conflicts between functions
4. Cannot cope with diversification
59
What are the features of a divisionalised structure?
1. The organisation is structured in accordance with product lines/brands or geographical locations
2. Headed by general managers who enjoy responsibility for their own resources
60
What is the hierarchy in a divisionalised structure?
Board of directors above divisions
61
What are the advantages of a divisionalised structure?
1. Enables product or geographical growth
2. Clear responsibility and accounting for products
3. Training of general managers
62
What are the disadvantages of a divisionalised structure?
1. The potential loss of control
2. Lack of goal congruence
3. Duplication
4. Specialists may feel isolated
63
What are the features of a matrix structure?
1. Aims to combine the benefits of the divisional structure and the functional structure
2. Usually found in multi-product and multi-functional organisations
3. Significant interrelationships and interdependencies
64
What is the advantage of a matrix structure?
Flexibility
65
What are the disadvantages of a matrix structure?
1. Dual command
2. Dilution of functional authority
3. Time-consuming meetings
66
Define decentralisation
Refers to the degree of autonomy/decision-making ability diffused through the organisation
67
What are the advantages of decentralisation?
1. Senior management free to concentrate on strategy
2. Better local decisions due to local expertise
3. Better motivation
4. Quicker responses/flexibility
5. Training
6. Career path
68
What are the disadvantages of decentralisation?
1. Loss of control by senior management
2. Dysfunctional decisions due to a lack of goal congruence
3. Poor decisions made by inexperienced managers
4. Extra costs regarding information
69
Which factors affect the degree of decentralisation?
1. Management style and ability
2. Size of the organisation
3. Range of products
4. Geographic location
70
Define the span of control
Considers how many people report to one superior
71
What are the features of tall organisations?
1. Many managerial levels
| 2. Narrow span of control
72
What are the features of flat organisations?
1. Fewer managerial levels
| 2. Wide-span of control
73
What are the advantages of tall organisations?
1. More promotional opportunities
2. Narrow spans of control mean more supervision
3. Smoother progression from one level to another
4. Small spans of control lead to more personal contact with the line manager
74
What are the disadvantages of tall organisations?
1. Inhibits delegation
2. More expensive in terms of management overheads
3. Extra levels of management slow down decision-making and communication
75
What are the advantages of flat organisations?
1. Wide span of control encourages more delegation
2. Lower management costs
3. Better communication between top management and the workers
76
What are the disadvantages of flat organisations?
1. Managers may be overworked as they have more people to supervise
2. Greater delegation means less central control
77
Which factors influence the span of control?
1. Complexity of work
2. Degree of change
3. Management's ability
4. Assistance received
5. Amount of non-supervisory work undertaken by the supervisor
6. Level of knowledge and experience of staff
7. Level of the cost associated with mistakes
8. Level of danger
9. The physical proximity of subordinates
78
What are the two extremes of structure summarised by Burns and Stalker?
1. Mechanistic
| 2. Organic
79
Define a mechanistic structure
1. Rigid
| 2. Formalised
80
Define an organic structure
1. Fluid
| 2. Flexible
81
What are the features of a mechanistic structure?
1. Formal
2. Hierarchical
3. Authority and control based
4. Focuses on efficiency
82
What are the features of an organic structure?
1. Informal
2. Flat
3. Project teams
4. Power is based on expertise
83
Define a sole trader
A single proprietor owns the business, taking all the risks and enjoying all the rewards
84
What are the advantages of a sole trader?
1. No need to share profits
2. Usually low cost
3. Often work from home
4. Self-sufficiency
5. Independence
6. Little or no regulation
7. Own boss
85
What are the disadvantages of a sole trader?
1. The sole trader carries unlimited liability
2. Personally responsible for business obligations incurred
3. High risk
4. Problems raising finance
5. Small
6. Totally dependent on health and presence of the proprietor
7. Can't use floating charges
86
Define partnership
Two or more people who own a business, taking all the risks and enjoying all of the rewards
87
What are the two different forms of partnerships?
1. General partnerships
| 2. Limited liability partnerships
88
Define general partnerships
No separate legal entity
89
Define limited liability partnerships
A separate legal identity exists, which means the partners' liability is limited to their investment in the partnership
90
What are the advantages of general partnerships?
1. Few regulatory obligations
2. Bring together a range of skills and experience
3. More owners to put finances into the business
4. Business not dependent on the health or presence of only one individual
91
What are the disadvantages of general partnerships?
1. Each partner has unlimited liability for the business debts
2. Potential disagreements between partners
92
Define a limited company
A company is a separate legal entity from its owners
93
What are the two forms of limited companies?
1. Private limited company
| 2. Public limited company
94
What is the shorthand for a private limited company?
Ltd
95
What is the shorthand for a public limited company?
Plc
96
What are the advantages of a limited company?
1. The liability of shareholders to business debts is limited to the initial investment in company shares
2. Ownership transferred easily by selling shares
3. Companies can find it easier to raise new capital
4. Can use both floating and fixed charges
97
What are the disadvantages of a limited company?
1. Legal burdens
2. Quoted companies can suffer from short-term pressure from city investors
2. Financial statements open to public scrutiny
98
Define groups
1. A number of companies under common control
2. The parent company will own shares in subsidiary companies to an extent that the owners of the parent company will also have control over the subsidiary
99
What are the advantages of operating as a group?
1. Different companies can be responsible for different products
2. Easy to sell off part of the business
3. Economies of scale through vertical integration
100
What are the disadvantages of operating as a group?
1. Consolidated accounts must be prepared
| 2. Many acquisitions add negative shareholder value
101
What are the types of alliances?
1. Joint venture
2. Strategic alliances
3. Licensing/franchising
4. Agency agreements
102
Define joint venture
A separate joint-owned company
103
Define strategic alliances
Loose collaboration
104
Define licensing/franchising
One company allows another to manufacture and market its product or service
105
Define agency agreements
One party distributes another's products
106
What issues need to be considered when forming alliances?
1. Sharing risks and returns
2. Splitting out costs
3. Potential conflicts over decisions
4. Potential to gain expertise from the other party
5. Allowing the third party access to your information and skills
