Organization Flashcards
What is organisational culture?
A firms shared values and beliefs and role models for behaviour
Name the function areas.
Research, finance, marketing, manufacturing
What are core operations? Name them.
They are a set of activities from which a firm actually carries out economic production.
Research and development
Purchasing
Manufacturing
Sales and marketing
Logistics
What are debt and equity for firms?
Debt and equity are activity undertaken by firms to collect money.
Describe the possible evolution of a business.
Stage 1: owner does everything
Stage 2: hires a salesperson and merchandise buyer
Stage 3: start the hiring of specialized people, such as accountants, as the owner will have to be away from the business frequently
What is an organizational structure?
A structure is the arrangement of the relationships of positions within an organisation.
When managers assign tasks and activities to specific individuals or groups and coordinate the diverse activities required to reach firm’s objectives.
Define specialization
Specialization is the division of labor into specific tasks and the assignment of employees to do a single task.
The goal is the Efficiency.
What may be the consequences of extreme specialization?
Poor quality work, employees become bored and dissatisfied with their work, high employee turnover ( quitting)
What are the elements of the organizational structure?
Departmentalization, centralisation, formalisation, span of control
What is departmentalization?
The grouping of jobs into working units usually called departments, units, groups or divisions.
How is departmentalization usually organized by?
Function, product, geographic region, customer
What are the pros and cons of functional dartmentalization?
Pros: small organizations, cost saving
Cons: slower decision making greater need for coordination
What are the pros and cons of product departmentalisation?
Pros: simplifies decision making, easier coordination within division
Cons: duplicate costs, emphasise product rather than organizational goals
What are the pros and cons of geographical departmentalization?
Pros: quick and efficient response to customers, better knowledge of customers
Cons: duplicate functions and resources, large administration staff, large control system to coordinate operations
What are the pros and cons of customer departmentalisation?
Pros: addresses unique requirements of each group of customers
Cons: large administration staff
What are the two levels of span of control?
Span of control is the organizational layers of management.
Flat organisation : wide span
Tall organisation : narrow span
Describe the narrow span of control
Superiors and not are not in close proximity, problems are common, interaction between layers are frequent managers have multiple responsibilities
Describe the wide span of control
Superiors and not are in close proximity, managers mostly supervise, few interactions between superiors and not, problems are not common, subordinates are highly competent
What is delegation of authority
Giving tasks and empowering employees, this brings responsibility and accountability
What is centralization?
The degree of authority delegation
Highly centralised vs decentralised: distinguish
Highly centralised higher levels of authority have more delegation of authority
Decentralised: more decision making on lower levels of the organization
What is formalization
Standardising behaviours through rules, procedures and training. It increases as firms get older, larger, regulated.
What are the main problems with formalisation?
Less organisational flexibility, discourages creativity, rules become the focus of attention
What is a multidivisional structure?
It organises structures into larger groups called divisions. It permits the delegation of authority.
What are the pros and cons of a multidivisional structure?
Pros: delegation of authority allows department managers to specialize, better decisions are made faster, by dividing the regions on a common region, product or customer, each is more likely to produce accurately following the needs of the customer.
What is the matrix structure?
Sets up teams from different departments; creates two or more intersecting lines of authority
The matrix superimposes project-based departments on the more traditional function-based departments
A matrix sets up teams from different departments, creating two or more intersecting lines of authority
NASA was one of the first to implement it because it needed to coordinate different projects at the same time.
What are the pros and cons of the matrix structure?
Pros: flexibility, draws on specific expertise, reduces the burden of CEOs, company can react quickly to a change in environment
Cons: expensive, complex, confusion may arise to whom is the correct authority line
Describe a team structure.
Non hierarchical, multiple group works, little or absent work formalisation as teams are able to work as they please, teams accountable for their performance.
