Organisation Structure Flashcards
What is an organisation structure?
The structure of an organisation is the total of the ways it divides labour into tasks and then achieves coordination among them.
What is centralization?
When the decisions are made by the top management of the organisation.
What is decentralization?
When many decisions are made lower in the business in the operating units.
What is the span of control?
Number of subordinates reporting directly to the person above them in the hierarchy.
What is the advantage of centralization?
Thorough debate of issues
Concentration of expertise
Economies of scale
Possibly less risk of the local managers acting illegally
Backing of centre to ensure wide support
What is the disadvantage of centralization?
Slower response to local conditions
less likely to consider local knowledge
local suppliers may give better value than corporate ones
Local staff are discouraged from taking responsibility
What is a functional structure?
When managers divide employees by profession and function.
What is a divisional structure?
A divisional structure is when tasks are grouped according to their output such as the products or the needs of different types of customers
What is a matrix structure?
When those doing a task report both to a functional and a project/divisional manager
What is the advantage of the functional structure?
clear paths and professional development
specialisation leads to high efficiency
common professional interests support good internal relations
What is the disadvantage of functional structure?
Isolation from wider interests damages promotion prospects
Conflict over priorities
Lack of wider awareness damages external relation
What is the advantage of a divisional structure?
Functional staff focus on product and customer needs
Dedicated facilities meet customer needs quickly
Common customer focus enables good internal relations
What is the disadvantage of a divisional structure?
Isolation from wider professionals and technical developments
Cost of duplicate resources
Focus on divisional not corporate needs
What is a network?
A network is when tasks required by one company are performed by other companies with expertise in those areas.
