Organisational structures

Question 1

What are organisational structures?

Answer 1

A system used to define a hierarchy within an organisation

It identifies each job, its function and where it reports to within the company

Determines how information flows between levels within the company

Useful to allow companies to remain efficient and focused

Successful organizational structures define each employee’s job and responsibilites and how it fits within the overall system

Question 2

What is the difference between a centralised and decentralised organisational structure?

Answer 2

Centralised structure = decisions flow from the top down

Decentralised structure = decision-making power is distributed among various levels of organisation

Question 3

What are the THREE types of organisational structure?

Answer 3

Functional

Divisional

Matrix

Question 4

What is a FUNCTIONAL organisational structure?

Answer 4

Most common

Organises company based on the specialisation

Divides firm into departments such as marketing, sales and operations

Question 5

What is a DIVISIONAL organisational structure?

Answer 5

Common in large companies

Each division essentially acts as its own company i.e.
Johnson and Johnson, with its own president / leader.

Normally based on project, product or subsidiaries

Question 6

What is a MATRIX organisational structure?

Answer 6

Combination of functional and divisional i.e. a functional group might work across a few divisions / department

E.g. employee may have duties in both sales and customer service