Organisational structure

Question 1

Define organisational structure

Answer 1

defines how the various functions of an organisation are arranged.

A successful strategy requires the organisation of people and decision making.

Question 2

What are the different types of structure?

Answer 2

• entrepreneurial
• functional
• divisional
• matrix
• flexible

Question 3

What are the features of an entrepreneurial structure

Answer 3

 Structure is built around the owner-manager – typical of small companies (early stages of development).
 The structure is totally centralised with all key decisions being made by the strategic leader (often the owner in an owner-managed business).

Question 4

What are the advantages and disadvantages of an entrepreneurial structure?

Answer 4

Adv:
 Fast decision making
 More responsive to market
 Good control
 Close bond to workforce

Disadv:
 Lack of career structure
 May be too centralised
 Cannot cope with diversification/growth

Question 5

What are the features of a functional structure?

Answer 5

 Outgrown the entrepreneurial structure, need to organise the business on a functional basis (economies of scale/specialisation).
 Smaller companies with few products and locations and exist in a relatively stable environment.

Question 6

What are the advantages and disadvantages of a functional structure?

Answer 6

Adv:
 Economies of scale
 Standardisation/efficiency
 Specialists more comfortable

Disadv:
 Empire building
 Slow to adapt to market changes
 Conflicts between functions (e.g. impairs cross department communication and innovation)
 Cannot cope with diversification

Question 7

What are Mintzberg’s building blocks and what should you do with them?

Answer 7

• operating core
• middle line
• strategic apex
• support staff
• technostructure

Identify the key one to the business and explain the ones lacking

Question 8

What is Handy’s Shamrock?

Answer 8

• a model for a more flexible firm
• analyses how companies can improve efficiency and cut costs by considering staffing issues more flexibly.
• business should focus on a core of vital ‘permanent’ staff with support from part-time and outsourced staff.