Organisational Design

Question 1

what is organisational structure?

Answer 1

is the form and systematic way the management of a business is organised

Question 2

what does an organisational structure take into account?

Answer 2

the relationship between individuals

who is in charge

who has authority to make decisions

how information is communicated

who carries out decisions

Question 3

what commons set of features that organisational design should try to achieve?

Answer 3

it should group employees into different dependents such as production, finance and sales

it should clearly show the relationships between employees

it should show the channels of communication for the organisation

the division of work among employees should be evident

Question 4

why is a computer would compose an organisational chart?

Answer 4

it indicates how employees linked to other employees in the business

they help individuals see their position in the business, who they are responsible for as well as whom they are accountable to

organisation charts allow companies to pinpoint areas where specialist workers are needed

organisational charts show how different departments relate to each other

Question 5

organisational charts can be demotivating as:

Answer 5

they have not been given the correct status on the chart

or if they are at the bottom of the chart this could cause upset

do small businesses really need them or use them

Question 5

organisational charts can be demotivating as:

Answer 5

they have not been given the correct status on the chart

or if they are at the bottom of the chart this could cause upset

do small businesses really need them or use them

Question 6

when deciding on a organisational structure a business must take in two important factors

Answer 6

management hierarchy

span of control

Question 7

what is hierarchy?

Answer 7

the order or level of management in a firm, from the lowest to the highest rank

it shows the chain command within the organisation- the way the authority is organised

Question 8

what is a chain of command?

Answer 8

route by which orders and decisions are passed through the organisation. the system of reporting relationships within the organisation

Question 9

benefits of having a short chain of command

Answer 9

decisions can be implemented much faster

less chance of mistakes being made, as less people involved there is lower possibility of poor communication

feedback on decision can be faster

increased responsibility motivates staff involved, motivated as seeing their ideas reaching high levels of management quickly

easier to make decisions

Question 10

what is the span of control?

Answer 10

refers to the number subordinates directly working under a superior or manager

allows better co-ordination of subordinates and ensures better communication with subordinates

Question 11

advantages of narrow span of control

Answer 11

tight control

supervision

Question 12

disadvantages of span of control

Answer 12

subordinates may not be motivated because they have little freedom

more costly as more supervisors are required to oversee a small number of employees

Question 13

advantages of wide span control

Answer 13

superiors can delegate more work, this leaves them with more time for planning the business future

subordinates have more freedom

Question 14

disadvantages of wide span control

Answer 14

requires a suitable superior who is capable of managing a large number of people

Question 15

what must be taken into account when deciding on a span of control?

Answer 15

the nature of the task

the group of subordinates

the ability and experience of superiors and subordinates

the communication system of the company

Question 16

what are the two types of organizational structures?

Answer 16

tall

flat

Question 17

what is a tall organizational structure?

Answer 17

a long chain of command and a narrow span of control

supervisors are responsible for skilled workers, who are in charge of a semi-skilled workers

Question 18

advantages of tall organizational structure?

Answer 18

it enables managers to closely supervise their employees

improving standard communication in the workplace

specialize in particular job roles

better chance of promotion

Question 19

disadvantages of tall organizational structure

Answer 19

employees are supervised closely

it prevents them from using their initiative and making their own decisions which decreases their motivation

managers also find this structure difficult as larger number of junior managers which increased costs as their is more to pay

a lot of layers for communication to get through because of the long chain of command

Question 20

what is a flat organizational structure?

Answer 20

taking out layers of middle management, which can also be called down-sizing or de-layering

Question 21

what is de-layering?

Answer 21

is the removal of a layer or several layers in the hierarchy to move away from a tall structure to a flatter structure

in this there is a short chain of command and wide span of control

Question 22

advantages of de-layering

Answer 22

saving made from laying off expensive managers

lead to better communication and better motivated staff

overlap between jobs may be reduced or removed

Question 23

disadvantages of de-layering

Answer 23

remaining managers may become demoralized

staff become over burdened as they have to do more work

communication may also suffer as there is each level and managers will not be able to supervise their work as much as those in the tall structures

fewer layers may also mean there are fewer opportunities for promotion for staff , leads to higher staff turnover

managers have more to do and are continuously stressed

Question 24

advantages of flat organizational structure

Answer 24

fewer layers of managers may reduce costs

a flatter structure is where a number of layer of management have been reduced and each manager has a wider span of control

more delegation means that staff are given greater responsibility, which might mean more opportunity to use their ability

communication can be improved due to layers being removed and a further reduction in overheads should mean greater efficiency overall

Question 25

disadvantages in flat organization structure

Answer 25

fewer opportunities for promotion

individual managers may have less time fort each subordinates and must therefore delegate effectively

staff may become overstretched, which may in turn cause stress

Question 26

what is centralisation?

Answer 26

the degree to which authority is delegated within an organisation. a centralised structure has a greater degree of central control

Question 27

advantages of centralisation

Answer 27

senior management will have more control of the business

procedures such as ordering and purchasing can be standardised throughout the organisation leading to economies of scale and lower costs

senior management can make decisions from the point of view of the business as whole whereas subordinates would tend to make decisions from only their departments point of view

managers should be more experienced and skilful in making decisions

a business may need stronger leadership by a central group of senior managers

communication may improve if there are fewer decision makers

customers may prefer the fact that every branch of retail is identical, meaning that they know exactly what to expect

Question 28

disadvanatges of centralisation

Answer 28

it puts a heavy strain on a few senior managers at the top of an organisation

communication is difficult with senior managers who are busy

threre is too much power given to a few individuals and they may abuse this power

no one in lower levels of mangment is gaining experience for the future

it can lead to inflexiability and innappropriate decisions at local level. it may also lengthen and delay the whole decision making process

Question 29

what is decentralisation?

Answer 29

the degree to which authority is delegated within an organsiatio. a decentralised structure involves a greater degree of delegated authority regions or to subordinates

Question 30

advanatges of decentralisation

Answer 30

it empowers and motivates workers as they have more autonomy to make their own decisions and making them feel as if they have more input the organisation which can encourage staff to be more innovative, thus improving their job satsifaction and commitment

it reduces the stress and burdens of senior managment as they have more time to consider long term strategy rather than day to day issues

it provides subordinates with greater job satisfaction by giving them more say in decision making

subordinates will have a better knowledge of the conditions of the workplace, allow them to make informed descisions

degelation shouls allow for greater flexiablilty and a quicker response to changes

a wide span of control offers greater decision making authority for subordinates and many improve job satisfaction, there is also likely to be lower in supervision

Question 31

disadvanatges of having decentralised organisation

Answer 31

decision making tackled quite differently by managers

efforts may not be co-ordinated and conflict could arise between departments

managers may not want to have authority delegated to them, higher staff turnover

a good system of control and communication must be in place if operational managers are to avoid making major errors of judgment

customers may not like the reduction in uniformity espically if they are able to compare branches unfavourably

Question 32

what influences the degree of decentralisation a business has?

Answer 32

the philsophy of managment- some organisations have a history of centralisation or decentralisation which may reflect the founder of the organsation

the method of growth- that have grown through a meger or takeover tend to adpot a more decentralised strucure than those that grow organically

the influence of the external enviornment- where the external enviornment is unstable, a higher degree of decentralsation is often chosen so that the organsation can respond more quickly to change

the characteristics of the organisation- the grater the number of products or services the organisation has, or markets it serves, the greater the degree of decentralisation forced upon it

Question 33

what is outsourcing?

Answer 33

the delegation of one or more business processes to an external providor who then owns manages and adminisyers the selected processors to an aggreed standard, a business does not have to do everything that is required to produce its products and services

Question 34

what is the corporate and functional objectives of quality?

Answer 34

do it-in house- easier to ensure quality and trace problems if done in-house

outsource- supplier may be specialist with greater experience and better equipment

Question 35

what is the corporate and functional objectives of cost?

Answer 35

in-house- departments don’t have to make a profit so might be cheaper maybe too small to obtain economies of scale easier communication

outsource- the main reason to outsource, supplier likely to achieve economies of scale motivated to keep costs low in order to make a profit extra costs of communication

Question 36

what is the corporate and functional objectives of speed?

Answer 36

in-house- easier to schedule work or production to fit in with business needs

outsourcing- speed of response can be set as a requirement of the outsourcing contract commercial pressure should encourage good performance

Question 37

what is the corporate and functional objectives of flexibility?

Answer 37

in-house- closest to the real needs of the business ability to respond may be limited by capacity

outsourcing- suppliers likely to have greater capacity and flexibility than in-house may have to balance conflicting demands from other customers

Question 38

most commonly outsourced streams of business include

Answer 38

IT sourcing

legal outsourcing

content development

web design and maintenance

Question 39

what are the key factors which have led to a growing tend of outsourcing

Answer 39

lack of expert-labour in some portions of the business

availability of cheaper labour, whilst not comprising on the quality of output

ability and feasibility to concrete on the other crucial business process

Question 39

what are the key factors which have led to a growing tend of outsourcing

Answer 39

lack of expert-labour in some portions of the business

availability of cheaper labour, whilst not comprising on the quality of output

ability and feasibility to concrete on the other crucial business process

Question 40

advantages of outsourcing

Answer 40

swiftness and expertise- most of the times tasks are outsourced to professional vendors who specialize in their field. the outsourced vendors also have specific equipment and technical expertise, completed faster and better quality

concrete on core process rather than the supporting ones- outsourcing the supporting processes gives the organisation more time to strengthen their core business process and focus on its strengths, allowing staff to concentrate on their main tasks and on the future strategy

risk-sharing- one of the most crucial factors determining the outcome of a campaign is risk- analysis. outsourcing certain components of your business process helps the organization to shift certain responsibilities to the outsourced vendor

reduced operational and recruitment costs- outsourcing eludes the need to hire individuals in-house, hence recruitment and operational costs can be minimized to a great extent. this is one of the prime advantages of offshore outsourcing

Question 41

disadvantages of outsourcing

Answer 41

risk of exposing confidential data- when an organization outsources HR, Payroll and Recruitment services, it involves a risk if exposing confidential company information to a third party

synchronizing the deliverables- in case you do not choose a right partner for outsourcing, some of the common problem areas include stretched delivery time frame, sub-standard quality output and inappropriate categorization of responsibilities, impact corporate image

hidden costs- although outsourcing most of the times is cost-effective at times the hidden costs involved in signing a contract while signing a contract across internastional boundaries may pose a serious threat

lack of customer focus- an outsourced vendor may be catering to the expertise- needs of multple organizations at a time. in such situations vendors may lack complete focus on your organisations tasks, not tailored to specific customers