Organisational Structure Flashcards
What is the definition of organisational structure?
An organisational structure is a framework that provides a business with the structure to achieve its objectives. It is the way in which the workforce within a firm is organised, including job roles and communication flows.
What are the benefits of a tall organisational structure?
- Narrow span of control - manager will have more time with subordinates - less stressful and increased motivation.
- Shared responsibility - decision-making process has more input - better decisions made.
- More promotion prospects - employees are more engaged and productive.
What are the drawbacks of a tall organisational structure?
- More expensive - more positions need to be paid - reduces profit margins.
- Decision-making is slower and time-consuming - no first-mover advantage.
- Communication can be distorted - wrong message passion on - poor brand image and customer service - low motivation.
What are the benefits of a flat organisational structure?
- Decision-making is quicker - the chain of communication is shorter - first mover advantage.
- Cheaper - costs are minimised - profit margins increase.
- Communication can be clearer - correct message communicated.
- Requires less supervisors - motivating.
What are the drawbacks of a flat organisational structure?
- Fewer opportunities for promotion - employees may leave or may reduce productivity.
- Managers have less time with subordinates - stressful and demotivating - loss of control.
- Role confusion and harder to meet objectives - each division has more responsibility.
- Managers have more people to manage - a wide span of control.
What is a centralised organisational structure?
Centralisation is when the responsibility for decision-making is maintained by a limited number of senior managers at the top of the hierarchy.
What are the advantages of a centralised organisational structure?
- Relieves workload and stress from subordinates - higher motivation.
- Senior managers maintain control - easier to reach business vision.
- Communication and decision-making process is quicker and easier.
- Senior managers are usually more qualified - can make better decisions.
What are the disadvantages of a centralised organisational structure?
- Subordinates may feel demotivated as they’re left out of the decision-making process.
- Less contribution to decision-making - fewer ideas shared, can lead to a lack of innovation.
When should a centralised organisational structure be used?
In a small business with low-skilled employees.
What is a decentralised organisational structure?
Decentralisation is when the responsibility for decision-making is delegated to a number of middle managers throughout the hierarchy.
What are the advantages of a decentralised organisational structure?
- Subordinates feel more motivated as they are involved in the decision-making process.
- More ideas are shared - increased innovation.
- Senior leaders will have more time to focus on strategic decisions (long-term).
What are the disadvantages of a decentralised organisational structure?
- Subordinates have an increased workload - can cause stress and demotivation.
- Communication and decision-making are slower - can lead to inconsistentncy.
When should a decentralised organisational structure be used?
When are employees are skilled, to solve a creative problem.
What is a matrix structure?
Teams are put together from different functional areas to work on specific problems.
What are the advantages of a matrix structure?
- Communication across functional areas.
- Range of viewpoints considered.
- Motivation - functions support eachother.
What are the disadvantages of a matrix structure?
- Potential loss of control.
- Can cause conflict.
- Teams can take time to work effectively.
What is a hierarchal structure?
Employees are organised into multiple levels based on seniority. Everyone is directly responsible for those on the next level down.
What are the advantages of a hierarchal structure?
- Clear channels of communication - everyone knows where they stand.
- Clear progression opportunities.
- Allows for close supervision of subordinates.
What are the disadvantages of a hierarchal structure?
- Slow communication - limited collaberation.
