Structure Flashcards
Choice of structure
- Functional / bureaucracy
- Divisional (geographic / product)
- Entrepreneurial
- Matrix
Functional / bureaucratic Structure
Departments that are defined by their functions ie the work they do.
Pros:
Specialism means the firm is more efficient
can benefit from economies of scale
Cons:
The rigid structure is unsuitable for changing environments
bureaucracy can hamper cross functional innovation and creativity
it can lead to conflict
Divisionalisation
The business can be divided into autonomous units based on geography, product or market.
Divisionalised structures can be adapted for growth and diversification and are most suitable for larger diversified businesses.
Some authority is retained at Head office but day to day service operations are handled on a territorial basis.
Matrix Structure
Advantages
- offers greater FLEXIBILITY
- it provides for inter disciplinary co-operation and a mixing of skills and expertise.
- It provides for a structure for allocating responsibility to managers for end results
- it should improve communication within the organisation
- Dual authority gives the organisation multiple orientations so that the functional specialists do not get wrapped up in their own concerns
Disadvantages
- it requires consensus and agreement which may slow down decision making.
- Dual authority threatens a conflict between managers
- One individual with two or more bosses is more likely to suffer stress at work
- it is sometimes more costly
- it may be difficult for the management to accept a matrix structure. A manager may feel threatened that another manager will usurp his authority.
Span of Control
Wide span of control
- good for easy repetitive work
- but loss of control
Narrow span of control
- good for specialist work
- but expensive
Flexibility
Hamdy’s shamrock
- professional core
- contractual fringe
- flexible labour force
- customers
Networks staffing (freelance v contract) leasing outsourcing customers
Centralised vs decentralised
Advantages of centralisation
- goal congruence
- co-ordination
- control
Disadvantages of centralisation
- transfer pricing
- loss of local knowledge
- disincentive
Advantages of decentralisation
- quicker
- accountability.
- local knowledge
- succession
- free up senior management
Flexible structure
Increasingly businesses are turning to flexible structures to allow them to adapt to changing environments. this can include creative use of:
- staffing - using freelance or contract workers
- leasing of facilities such as machienry, IT and accommodation
- Production may be outsourced, even to offshore companies where labour is cheaper
- interdependence of organisations is emphasised by the sharing of functions and services
- databases and communication create genuine interactive sharing of common data
Boundary-less organisations
The removal of both internal and external barriers to facilitate collaboration internally and with external parties
Network organisation
The relationships between individual organisations including outsourcing, sharing resources and collaboration on non-core activities with competitors
Virtual organisations
The virtual organisation is a collective term which covers both virtual firms and virtual teams. The key characteristics are the use of internet, email extranets, cloud computing and e-conferencing
Hollow organisations
Tis term refers to organisations where all non core activities have been outsourced to specialist providers
Modular organisations
In this case the production process is divided into modules and each module is outsourced to a different speciliast. The modular organisation assembles and distributes the final product.
Strategic apex
Is responsible to the organisation’s owners and wishes to retain control over decision making (centralisation)
The technostructure
consists of analysts whose raison d’etre is design of procedures and standards
wants an environment that is standardised and highly regulated.
