Organisational Structures Flashcards
Why should businesses have a structure?
- Because all businesses should organise what they do and having a structure makes it easier for them to do this.
- A clear structure makes it easier to see what each part of the business does.
What does the organisational structure of a business determine?
Give at least two examples.`
At least two from:
- Authority and responsibility - who is responsible for whom and who is in charge?
- Individual job roles and titles
- The people to whom others are accountable.
- The formal routes through which communication flows in the business.
What factors will the organisational structure of a business depend on?
Give at least two examples.
At least two from:
- The size of the business.
- The type of business.
- Management and leadership style.
- The competitive environment.
What structure will small businesses tend to take?
- Flat hierarchal structures
What structure will larger businesses tend to take?
- More layers of hierarchy with more departments and functions.
What happens to decision making in businesses with centralised structures?
- This is kept firmly at the top of the hierarchy among the most senior management.
What are the main advantages of centralised structures?
Give at least two examples.
At least two from:
- It is easier to implement common practices and policies for the business as a whole.
- It prevents other parts of the business from becoming too independent.
- It is easier to control from the centre e.g with budgets.
- Economies of scale and overhead savings are easier to achieve.
- Decision making is usually quicker.
What are the main disadvantages of centralised structures?
Give at least two examples.
At least two from:
- More bureaucratic - there are often extra layers in the hierarchy.
- Local or junior managers are likely to be much closer to customer needs.
- Lack of authority down the hierarchy may reduce manager motivation.
- Customer service does not benefit from flexibility and speed in local decision making.
What happens to decision-making in businesses with decentralised structures?
- Decision-making is spread out to include more junior managers in the hierarchy.
Give at least two advantages of a decentralised business structures.
At least two from:
- Decisions are made closer to the customer.
- Businesses are better able to respond to local circumstances.
- Improved level of customer service.
- Consistent with aiming for flatter hierarchy.
- This is a good way of training and developing junior management.
- This should improve staff motivation.
Give at least two disadvantages of decentralised business structures.
At least two from:
- Decision-making is not necessarily strategic.
- It is more difficult to ensure consistent practices and policies - customers might prefer consistency from location to location.
- It is harder to achieve financial control. There is a higher risk of cost overruns.
What does the matrix organisational structure do?
Combine traditional department seen in functional structures with project teams.
What happens in a matrix structure?
Individuals working across teams and projects as well as within their own department or function.
Give at least two advantages of a matrix business structure.
At least two from:
- It can help breakdown traditional department barriers and improve communication across the entire organisation.
- It can allow individuals to use particular skills within a variety of contexts.
- It avoids the need for several departments to meet regularly therefore reducing costs and improving coordination.
- It is likely to result in greater motivation amongst the team members.
- It encourages cross-fertilisation of ideas across departments e.g. helping to share good practice and ideas.
- It is a good way of sharing resources across departments which can make project more cost-effective.
Give at least two disadvantages of matrix business structures.
At least two from:
- Members of the project teams that may have divided loyalties as they report to two line managers.
- There may not be a clear line of accountability f or project teams given the complex nature of matrix structures.
- They are difficult to coordinate.
- It takes time from matrix team members to get used to working in this kind of structure.
- Team members may neglect their functional responsibilities.
