Organisational structure Flashcards
Organisational structure
The way in which work is divided up and allocated, outlines roles of individuals and groups in the organisation (it changes over time)
Entrepreneurial structure
Built around owner manager and typical for small businesses in early stages, also entrepreneur may have specialist knowledge of product
2 +ve’s and -ve’s of entrepreneurial structure
+ve
fast decision making
close bond to workforce
-ve
lack of career structure
can’t cope with fast growth
Functional/departmental structure
Group together employees that have similar tasks, found in organisations that have outgrown the entrepreneurial structure
Good for small businesses with few products existing in stable environment
2 +ve’s and -ve’s of functional/departmental structures
+ve
economies of scale
career opportunities
-ve
slow decision making
conflicts between functions
Divisional/ product structure
Organisation is split into several divisions, each overseeing something. Each division will have a functional structure, with all departments it needs in order to operate in market
Divisions ran as separate units
Geographical structure
Similar to divisional structure, but involves each division covering specific location
2 +ve’s and -ve’s of geographical structure
+ve
clear responsibility for areas
allows local decision making
-ve
potential loss of control
allocation of central costs could be a problem
Matrix structures
- Combo of functional and divisional structures
- Requires dual reporting to two managers
What is the aim of matrix structures?
To combine benefits of both divisional and functional structures
2 +ve’s and -ve’s of matrix structures
+ve
encourages teamwork and exchange of opinions and expertise
flexibility
-ve
dual command and conflict
time-consuming meetings
Authority
relationship between participants within an organisation
the right to give orders and the power to exact ‘obedience’
Responsability
liability of person to be called to account for his or her actions
Can responsibility be delegated to others?
No
Delegation
process where manager assigns part of his authority to a subordinate to fulfil his duties
When can delegation occur?
when a manager initially possesses the authority to delegate, responsability can never be delegated
Scalar chain
line of authority which can be traced up or down the chain of command
relates to no. of levels of management within an organisation
Tall organisation
- Has many levels of management and narrow span of control
- More bureaucratic and take longer to make decisions due to large number of levels of management that need to be involved
Flat organisation
- Few levels of management and a wide span of control
- Weaker control and fewer chances for employees to progress or be promotes (can have adverse impact on motivation of employees)
Where are decisions made in a centralised structure?
Upper levels of organisation’s hierarchy
Where are decisions made in a decentralised structure?
authority to take decisions is passed down to units and people at lower levels
3 factors that affect amount of decentralisation:
- management style
- geographic spread
- size of organisation
2 +ve’s and -ve’s of decentralisation:
+ve
senior management free to focus on strategy
better local decisions due to local expertise
-ve
loss of control by senior management
poor decisions made by inexperienced managers
Virtual organisation
When an organisation outsources many of its functions to other organisations and exists only as a network of contacts, with few functions staying in-house
Anthony triangle (levels of planning)
- Strategic planning
- Tactical planning
- Operational planning
Strategic planning
Undertaken by senior managers, involves making long-term decisions for whole firm
Tactical planning
Undertaken by middle management and looks at plans for specific divisions and specifies how to use resources
Operational planning
Undertaken by junior managers and supervisors, short-term, detailed and practical
3 reasons why charities would engage in strategic planning are:
- helps create long term vision and direction
- helps gain commitment from donors to particular cause
- Increase awareness of charities’ cause and helps to build stronger link with appropriate governmental bodies and private sector organisations
Management
effective use of business resources in order to achieve key objectives with max. efficiency
when will a manager become a leader?
if they can influence people to achieve goals of organisation without relying on use of formal authority
supervisor
person given responsibility for planning and controlling the work of group of employees
responsible for ensuring specified tasks are performed correctly
who is lowest level of management?
supervisors
key functions of supervisors:
- undertake technical/operational work
- provide advice and support to teams in order to solve problems
- monitor work by means of detailed, daily information which is summarised and passed on to senior management
Role and key concern of R&D department
Improves existing products and develops new products by use of new tech.
product features and functionality
Role and key concern of purchasing (procurement) department
acquiring products necessary for business
quality and stock levels
Role and key concern of production department
converting raw materials into finished products
quality of finished products
Role and key concern of HR department
ensuring sufficient staff are available to support ops
recruitment and training
Role and key concern of marketing department
identifying customer needs
market research
Role and key concern of finance department
financial controls
accuracy and completeness of record keeping
