Organisational Structures (Chapter 8)

Question 1

What is the definition of a Management Structure?

Answer 1

The way in which part of an organisation is formally arranged to achieve business objectives.

Question 2

What is the definition of a Management Hierarchy?

Answer 2

The arrangement that provides increasing authority at higher levels of the hierarchy.

Question 3

What are the 3 levels of a typical Management Hierarchy?

Answer 3

• Top/Senior Management
• Middle Management
• Frontline Management.

Question 4

What is the definition of Chain of Command/Line of Authority?

Answer 4

The system that determines responsibility, supervision and accountability of members of an organisation.

Question 5

What is the definition of Span of Control?

Answer 5

Indicates the number of people for whom the manager is directly responsible.

Question 6

What is the definition of Delegation?

Answer 6

Occurs when a manager or supervisor is able to assign authority to an employee who becomes responsible for decision making.

Question 7

What are the 4 types of Management Structures?

Answer 7

Functional, Divisional, Product and Team.

Question 8

What is the definition of a Functional Structure?

Answer 8

The business organisation is grouped into areas according to what is done in that area of the business. Similar tasks are together and this is useful when specific, similar products or services are being made.

Question 9

What are 3 Advantages of a Functional Structure?

Answer 9

• defined career paths
• task specialisation
• efficient use of resources

Question 10

What are 3 Disadvantages of a Functional Structure?

Answer 10

• lack of flexibility
• narrow department focus
• “empire building” behaviours

Question 11

What is the definition of a Divisional Structure?

Answer 11

Each section of the organisation functions as a self-contained unit and might be either functional or product based.

Question 12

What are 3 Advantages of a Divisional Structure?

Answer 12

• direction of expertise
• encouragement of cooperation between departments
• greater flexibility when adapting to environmental changes

Question 13

What are 2 Disadvantages of a Divisional Structure?

Answer 13

• reduced benefits of economies of scale
• can promote rivalry between divisions

Question 14

What is the definition of a Product Structure?

Answer 14

The organisation is grouped into areas according to the individual products being sold.

Question 15

What are 2 Advantages of a Product Structure?

Answer 15

• allows the organisation to make decisions relatively quickly
• able to locate all personnel related to each area together

Question 16

What are 2 Disadvantages of a Product Structure

Answer 16

• spreading of overhead costs over a larger area
• work may be duplicated

Question 17

What is the definition of a Team Structure?

Answer 17

An organisational structure where employees are empowered and layers of management are removed, with the aim of improving communication, encouraging cooperation, speeding up decision-making and generating innovative business solutions.

Question 18

What are 2 Advantages of a Team Structure?

Answer 18

• the team is self-directed and has a specific goal
• communication problems are broken down

Question 19

What are 3 Disadvantages of a Team Structure?

Answer 19

• potential personality clashes
• conflict which may not be resolved
• poor management