Organisational structure

Question 1

Factors that influence the organisational structure

Answer 1

• size of business
• range of activities (e.g. expansion, projects that are proposed)
• style of management

Question 2

Delayering

Answer 2

removal of one or more of the levels of hierarchy from an organisational structure

Question 3

Advantages of delayering

Answer 3

• reduces business cost
• shortens chains of command
• increases spans of control and opportunities for delegation

Question 4

Disadvantages of delayering

Answer 4

• ‘one-off’ costs of making managers redundant
• increased workloads for remaining managers — stress and demotivation
• reduces sense of job security for the workforce

Question 5

Line managers

Answer 5

managers who have direct authority over people, decisions and resources within the hierarchy of an organisation

Question 6

Staff managers

Answer 6

managers who, as specialists, provide support, information and assistance to line managers

Question 7

Informal organisation

Answer 7

the network of personal and social relations that develop between people within an organisation

Question 8

Advantages of informal groups

Answer 8

• avoiding personality clashed between people in different groups
• basing teamworking in informal groups

Question 9

Disadvantages of informal groups

Answer 9

• the informal group leader may have more power and influence over the team than the formal leader

Question 10

Organisational structure

Answer 10

the internal and formal framework of a business that shows the way in which management is organised and linked together and how authority is passed down the organisation

Question 11

What an organisational structure tells us

Answer 11

• the formal lines of authority and communication in the organisation
• levels of hierarchy, chain of command, span of control

Question 12

Hierarchical structure

Answer 12

different layers of the organisation with fewer and fewer people on each higher level

Question 13

Advantages of hierarchical structure

Answer 13

• well defined roles
• clear chain of command
• hierarchy determines the importance of a role

Question 14

Disadvantages of hierarchical structure

Answer 14

• suggests one way communication is the norm – not effective
• few horizontal links – lack of coordination
• inflexible – all managers defend their position

Question 15

Matrix structure

Answer 15

an organisational structure that create project teams that cut across functional departments

• highly project focused
• an individual’s ability to contribute to the team rather than their position in hierarchy

Question 16

Advantages of matrix structure

Answer 16

• total communication with all team members
• creative solutions
• teams made easily – respond to change in market and technology

Question 17

Disadvantages of matrix structure

Answer 17

• reduced bureaucratic control
• increased staff motivation through taking more responsibility

Question 18

Level of hierarchy

Answer 18

a stage of the organisational structure at which the personnel on it have equal status and authority

Question 19

Advantages of tall organisations

Answer 19

• opportunities for promotion -> greater staff motivation
• staff gain more support from their line manager
• higher degree of supervision

Question 20

Disadvantages of tall organisations

Answer 20

• span of control is narrow and chain of command is long — makes communication slower
• can be expensive to run due to high wage costs

Question 21

Advantages of flat organisations

Answer 21

• few levels of hierarchy
• lines of communication are short -> quick decision making
• staff motivation as they work more independently

Question 22

Disadvantages of flat organisations

Answer 22

• wide span of control, larger delegation, more workload
• less promotion opportunities within a flat structure

Question 23

Chain of command

Answer 23

this is the route through which authority is passed down an organisation — from chief executive and the board of directors

Question 24

Span of control

Answer 24

the number of subordinates reporting directly to a manager

Question 25

Delegation

Answer 25

passing authority down the organisational hierarchy

Question 26

Advantages of delegation

Answer 26

• gives senior managers more time to focus on important strategic roles
• shows trust in subordinates and this can motivate and challenge them
• develops and trains staff for more senior positions

Question 27

Disadvantages of delegation

Answer 27

• inadequate training -> failed delegation
• insufficient authority given -> failed delegation
• delegating boring jobs -> staff demotivated

Question 28

Examples of delegation

Answer 28

• telling someone what to do in the greatest detail
• delegating research for decision making
• delegating with veto rights

Question 29

Centralisation

Answer 29

keeping all of the important decision-making powers within head office or the centre of the organisation

Question 30

Decentralisation

Answer 30

decision-making powers are passed down the organisation to empower subordinates and regional/product managers

Question 31

Advantages of centralisation

Answer 31

• a clear chain of command because everyone knows who to report to
• can focus on the fulfillment of the business’ vision with ease
• reduces costs by using standard methods and procedures

Question 32

Disadvantages of centralisation

Answer 32

• bureaucratic leadership
• lacking time to supervise the implementation of decisions
• lack of employee loyalty because there is no initiative in work

Question 33

Disadvantages of decentralisation

Answer 33

• coordination is difficult
• expensive bc need more managers