Session 25 - organisational design

Question 1

Give 3 reasons to have an organisational structure in a business

Answer 1

• all businesses have to organise what they do
• a clear structure makes it easier to see which part of the business does what
• there are many ways to structure a business

Question 2

Describe the hierarchy organisational structure

Answer 2

System where employees are ranked based on status and authority. The higher an employee, the more importance and power they have over those below due to higher wages and better working conditions

Question 3

Describe the delegation organisational structure

Answer 3

Managers use authority to assign tasks to subordinates lower down chain of command (transfer responsibility)

Question 4

Describe the chain of command organisational structure

Answer 4

Flow of tasks and information down the hierarchy aswell as orders whereas complaints and status reports flow up the hierarchy

Question 5

Define organisational structure

Answer 5

a system that outlines how certain activities are directed in order to achieve the goals of an organization

Question 6

Outline the positives of a tall (hierarchical) organisational structure

Answer 6

• Hosts many layers as used in the police and military
• There are lots of opportunities for promotion
• Work is shared amongst more people so stress is reduced
• Very orderly and organised as everyone knows where they stand in the hierarchy

Question 7

Outline the negatives of a tall (hierarchical) organisational structure

Answer 7

• Information takes a long time to get from the bottom to the top
• Takes a long time for decisions to be made

Question 8

What are the characteristics of a flat structure

Answer 8

Wide and flat means span of control is wider for superiors. This requires greater delegation but fewer levels allows for quicker communication. opportunities for promotion is lower

Question 9

What are the characteristics of a matrix structure (project teams)

Answer 9

Designed to overcome communication problems of hierarchical structures. Teams are created containing representatives from all departments. Led by project leader to bring skills together

Question 10

List the advantages of a matrix structure

Answer 10

Used in a business where projects need lots of
coordination between the functional areas, such as
production, finance, marketing etc. For example
production need to know from finance if they can
order in the steel to complete the project

Breaks down barriers between departments

Means everyone has to work as a team

Tighter control of the project

Sharing of ideas from experts in their relative fields.

Question 11

What is a decentralised structure

Answer 11

In a decentralised structure, decisions are not solely made at central head office. Decisions are able to be made locally by local managers.

Question 12

What is a centralised structure

Answer 12

where a business has its organisation of management and admin at one central head office. One central shared budget. McDonalds is a good example