Organisation and Business Structures Flashcards
What are the four levels of management
Top management
Middle management
First-line management
Direct operation staff
What are the six components of Mintzberg’s organisational building blocks
Ideology
Strategic Apex
Middle line
Operating core
Supported by:
Technostructure
Support staff
What are the seven basic principles of organisation structure
Division of work Scalar chain Correspondence of authority and responsibility Centralisation Unity of command Unity of direction Equity
What are Mintzberg’s five main organisation configurations
Simple (Entrepreneurial) Machine bureaucracy (Functional) Professional bureaucracy Divisional Adhocracy (Matric)
What are the main features of a simple/entrepreneurial structure
Built around owner-manager
Typical of smaller companies
Centralised with all key decisions made by owner
What are the advantages and disadvantages of a simple/entrepreneurial structure
Adv.: Fast decision making
More responsive
Good control
Close bond
Disadv.: Lack of career structure
Too centralised
Cannot cope with diversification/growth
What are the main features of a functional structure
Outgrown simple structure
Business is organised on a functional/specialised basis
Smaller companies with a few products
Board of directors supervising various departments
What are the advantages and disadvantages of a functional structure
Adv.: Economies of scale
Standardisation/efficiency
Specialists more comfortable
Disadvantages: Slow to adapt
Conflict between functions
Further diversification is difficult
What are the main features of a divisional structure
Structured in accordance with lines/brands/location
Headed by general managers who have responsibility
What are the advantages and disadvantages of a divisional structure
Adv.: Enables product/geographical growth
Clear responsibilities
Training of general managers
Disadv.: Potential loss of control
Lack of congruence
Specialists isolated
What are the main features of a matrix structure
Combines benefits of the divisional/functional structures
Multi-product or multi functional organisations
Relies on interrelationships and interdependencies
What are the advantages and disadvantages of a matrix structure
Adv.: Flexibility
Focus on customers
Improved communications
Disadv.: Dual command
Dilution of authority
Time consuming meetings
What are the pros of decentralising authority
Senior management free to concentrate on strategy
Better local decisions
Better motivation
Quicker responses
What are the cons of decentralising authority
Loss of control
Lack of goal congruence
Poor decisions from inexperienced managers
Extra costs
What is the difference between a tall and flat organisation
Tall: Many managerial levels, narrow spans of control
Flat: Fewer managerial levels, wide span of control
What are the advantages of a tall organisation
More promotional opportunities
More supervision
Smoother progression
More personal contact
What are the disadvantages of a tall organisation
Inhibits delegation
More expensive
Extra levels of management slow things down
What are the advantages of a flat organisation
Encourages more delegation
Lowers management costs
Better communication from bottom to top
What are the disadvantages of a flat organisation
Managers may be overworked
Less central control
Too much supervising
What are the differences between a mechanistic and organic organisation
Mechanistic: Rigid, formalised, hierarchical, efficient
Organic: Fluid, flexible, informal, teams
What is the difference between a general partnership and a limited liability partnership
Limited liability partnerships are separate legal entities
What are the advantages and disadvantages of a general partnership
Adv: More finance in business
Bring together skills/experience
Disadv: Potential disagreements
Unlimited liability for partners
What are the advantages of a limited company
Liability of shareholders is limited to initial investment
Ownership transferred easily
Easier to raise capital
Can use both floating and fixed charges
What are the disadvantages of a limited company
Subject to company audits
Public scrutiny
What are the four types of alliances
Joint ventures
Licensing/Franchising
Strategic alliances
Agency agreements
What is a licensing alliance
One company allows another to produce its product
What is a strategic alliance
Loose collaboration
What is an agency agreement alliance
One party distributes another’s products
What is a group
A number of companies under common control of a parent company
