Organisation Structure and Teams Flashcards
Define Organisational Structure
Configuration of departments, authority and jobs within an organisation. It regards who reports to whom, what work is done and where.
The structures are often considered to be hierarchical or flat, also known as vertical or horizontal.
Define Organisational Process
How things get done and how things are transformed inputs into outputs that customers value.
Define Departmental Structure:
The process of subdividing work and workers into separate organisational units responsible for completing particular tasks.
Departmental Structure: Functional
○ Based on the different business functions or expertise used to run a business.
○ The basic underlying structure is ‘What job do you do?’ and ‘What function are you working on’?.
○ The advantages of this structure is that it allows work to be done by highly qualified specialists, lowers costs by reducing duplication.
○ However, a disadvantage is that as companies grow it may lead to slower decision making as well as communication across departments can become difficult as each specialty/occupation has unique culture and jargon.
Departmental Structure: Product
○ Organising work and workers into separate units responsible for producing particular products or services.
○ Basic principle is ‘What product or service do you work on’.
○ Advantage is that it allows for managers and workers to specialise in one area, but also allowing them to broaden their experiences as they are exposed to an entire product line. Another advantage is that it allows for work performance to be easily assessed. Further, decision making should be faster as managers and workers are responsible for the entire product line, rather than for separate functional departments, and therefore fewer conflicts.
○ The main disadvantage is duplication in departments, often resulting in higher costs. Another challenge is coordinating across different product departments.
Departmental Structure: Customer
○ Organises work and workers into separate units that are responsible for different types of customers.
○ Main principle ‘What kind of customers do you work with?’
○ The main advantage is that the organisation focuses on the customers needs rather than on products or business functions. It also allows companies to adapt to their products to the needs and problems of their customers.
○ The main disadvantage is duplication of resources, it also can be difficult to achieve coordination across departments. Potentially employees my also make decisions to satisfy the customers needs but in turn are hurting the business.
Departmental Structure: Geographic
○ Organising work and workers into separate units responsible for doing business in particular geographic areas.
○ Main principle is ‘What area are you responsible for’?, such as city, state, country etc.
○ The main advantage is that it helps companies focus on the demand of specific markets. It also can reduce costs having the resources closer to customers.
○ The main disadvantage is that it can lead to duplication of resources and due to the geographical difference between departments it is especially hard to coordinate.
Departmental Structure: Matrix
○ Combines two different types, the most common being product and functional forms.
○ Most employees report to two bosses, one from each core part of the matrix.
○ Primary advantage is that it allowed companies to manage large tasks, the efficiency from the hybrid model comes down to avoiding duplication. Another advantage is the pool of resources available to carry out large and complex tasks.
○ The main disadvantage is that a good level of coordination and management is required to achieve completion.
Simple Matrix
Simple matrix is the form of matrix departmentalisation in which managers in different parts of the matrix negotiate conflicts and resources.
Complex Matrix
Complex matrix is where managers in different parts of the matrix report to matrix managers. Matrix managers aid to sort out conflicts and problems.
Define Authority
Authority is the right to give commands, take action and make decisions to achieve organisational objectives.
Organisational Authority: Chain of Command
○ The chain of command is the vertical line of authority that clarifies whom reports to whom throughout the organisation.
○ Unity of command is a management principle that employees should report to only one boss. Therefore matrix organisations violate this principle.
Organisational Authority: Line versus staff authority
○ Line authority is the right to command immediate subordinates in the chain of command.
○ Staff authority is the right to advise but not command, others who are not subordinates in the chain of command.
○ A line function is an activity that directly relates to the selling or making of a company’s products.
○ A staff function does not contribute directly to the selling or making of a companies products but instead supports the line functions.
Organisational Authority: Delegation of Authority
○ Assignment of direct authority and responsibility to underlings for which a manager usually takes care of.
○ Three transformations occur, the manager gives the responsibility and authority to the subordinate. The subordinate then transfers accountability to the manager.
○ The first transfer involves the manager transferring the full responsibility to the subordinate. Managers often fear that the task won’t be done as well as if they had done it themselves.
Delegating tasks allows for managers time to be freed and work on more important responsibilities. It can be a hindrance if the person who gave the task then interferes later.
○ The second transfer is that the delegations is that the manager gives the subordinate full authority over all aspects needed to do the job. Thus meaning that responsibility has been delegated.
○ The third transfer that occurs is that the subordinate noes has to be accountable for getting the work done and achieving results.
Organisational Authority: Degree of Centralisation
○ Centralisation is the location of most authority at the upper levels of the organisations. In these organisations managers make most of the decisions, even the small ones.
Decentralisation is the location of a significant amount of authority in the lower levels of the organisation. An organisation that is decentralised will have a high degree of delegation at all levels. These organisations may have more employees which will have a higher amount of capability.
