U1- Structures

Question 1

Describe a flag structure (3 things)

Answer 1

There are fewer levels of management
There is a short chain of command
Managers have a wider span of control

Question 2

Give 3 advantages to a flat structure

Answer 2

It is much easier for information to flow up and down the organisation

Gathering information and consulting staff takes less time so some decisions can be made more quickly

The business is more able to respond and deal quickly to changes in the market

Question 3

Give 2 disadvantages to a flat structure

Answer 3

The removal of management/ supervision levels means that there is less control throughout the organisation

Mistakes are easier to make and harder to identify

Question 4

Describe a hierarchical (tall) structure (name 3 things)

Answer 4

Each manager has a narrow span of control

There are many layers of management and a long chain of command

This structure is useful where there has to be tight control over operations such as the military

Question 5

Give 4 advantages of a hierarchical structure

Answer 5

There is a great deal of control and supervision

There are clearly defined roles and clearly defined procedures for carrying out those roles

Staff will become expert in the performance of their roles

The business can save money by having only one set of resources for these workers to use

Question 6

Give 3 disadvantages to a hierarchical structure

Answer 6

Communication can be slow

Inability to change quickly makes the business vulnerable to changes in the market in which it operates

Decisions that require information from the various levels can take a long time to be made

Question 7

Describe an entrepreneurial structure (name 3 things)

Answer 7

There are only 1 or 2 main decision makers

Usually used in small businesses

The business relies wholly on the expertise of the decision maker

Question 8

Give 4 advantages of an entrepreneurial structure

Answer 8

Decisions are made quickly

Decisions are made for the benefit of the organisation

Decision makers are very experienced

Staff know who they are accountable to

Question 9

Give 3 disadvantages to an entrepreneurial structure

Answer 9

Staff can become demotivated as they are not included in the decision making

If the decision maker is unavailable then the decisions can’t be made

It places a very heavy workload on these few individuals

Question 10

Describe a matrix structure (name 3 things)

Answer 10

Used when the business is involved in a number of large projects such as a construction firm

Teams are formed with staff from all/ most of the functional departments

Each member of the team will have their own specialist skills and will be responsible for their own particular expertise

Question 11

Give 4 disadvantages of a matrix structure

Answer 11

Teams of different specialists provide a range of skills that can increase innovation

Employees can be motivated and empowered

There is no need to fund the structure permanently

Complex problems can be solved effectively

Question 12

Give 2 disadvantages of a matrix structure

Answer 12

Employees will have 2 managers to report to: their function manager and the matrix

Matrix structures can be costly to set up and manage

Question 13

Describe a centralised structure (name 2 things)

Answer 13

Relies heavily on a number of key individuals who make most of the decisions within the organisation

Complete control of the organisation is held by these key members

Question 14

Give 4 advantages of a centralised structure

Answer 14

A standard method of operation is developed across the whole business

Economies of scale can be achieved through centralised purchasing

Leadership should be strong

It is easier to promote a corporate culture/ image

Question 15

Give 3 disadvantages to a centralised structure

Answer 15

It stifles creativity of the staff

It does not allow for staff to be easily prepared for promotion

It is difficult for decision makers to relate to local conditions because they are removed from the day to day operations of the business

Question 16

Describe a decentralised structure (name 3 things)

Answer 16

There is responsibility and decision making given to Middle and lower managers

Some decisions are taken locally, delegating authority

Head office is seen more as providing a support role for the organisation

Question 17

Give 4 advantages to a decentralised structure

Answer 17

It allows the organisation to be more responsive to changes in the market or environment in which it operates

The people marking the decisions are much closer to the customers and have a far better knowledge of their needs

Being trusted to make decisions can make the staff feel more wanted and appreciated which in turn increases their motivation

It allows senior management to focus on key decisions

Question 18

Give 3 disadvantages to a decentralised structure

Answer 18

Some overall control of the business will be lost

Inexperienced managers can make decisions that harm the whole business

Higher salaries may have to be paid

Question 19

What is de-layering?

Answer 19

The removal of levels of management or supervision from the organisation

Question 20

What are the consequences of de-layering? Name 4

Answer 20

It can lead to better communication

It empowers staff as they have increased responsibility

It reduces the costs of salaries for the organisation

It may improve productivity

Question 21

What is the span of control?

Answer 21

The number of people any manager or supervisor has working directly for him or her

Question 22

Give 3 advantages to a wide span of control

Answer 22

Fewer managers are required and wages are saved

Quality of staff will be improved

It can be motivational to managers as they have greater power

Question 23

Give 3 disadvantages of a wide span of control

Answer 23

It can place managers under stress

Subordinates may resent having to make all the decisions

Managers will have less time for planning which can result in poor decisions

Question 24

What is downsizing?

Answer 24

It involves reducing the operating costs of the organisation by looking for what it does not need to spend money on

Question 25

What are 2 advantages to downsizing?

Answer 25

Reduces the costs for the organisation making it more efficient and competitive

Increases shareholders confidence

Question 26

What are 2 disadvantages to downsizing?

Answer 26

Possible bad publicity

Redundancy costs

Question 27

Name 6 factors which impact on the structure the organisation uses

Answer 27

Size- more formal structure is needed for a large business

Technology- this can change the structure of the business, it will be easier to communicate over large distances

Product- customer amount

Market- size of market and location

Staff- knowledge and skills, less formal structure is needed if staff are skilled

Finance- additional managers cost money

Question 28

What is a mix of groupings called?

Answer 28

A hybrid structure

Question 29

What is functional grouping?

Answer 29

When the organisation is split into departments which represent the main functional areas of the business

Question 30

Give 4 advantages to functional grouping

Answer 30

The resources of the organisation will be better used

Allows for specialisation in each functional area

Decision making is better

Staff know who to turn to if they need specific expertise

Question 31

Give 3 disadvantages to functional grouping

Answer 31

Staff loyalty is to the department rather than the organisation

Communication barriers between departments can exist

Response to the changes in the business environment is slow

Question 32

What is product/ service grouping?

Answer 32

When the organisations activities are grouped around the different products or services that it provides

Such as Virgin

Question 33

Give 4 advantages to product grouping

Answer 33

Each division will be a self contained unit

Each member of staff in the division will have specific knowledge about that specific product

It is easier to see which areas or products are doing well and which are having problems

This grouping allows for a quicker response to external changes such as changes in customer requirements

Question 34

Give 2 disadvantages to product grouping

Answer 34

Divisions may find themselves competing against each other

It is difficult to share research and development or equipment across divisions

Question 35

What is customer grouping?

Answer 35

Where the individual needs of different customers are important, the business will organise in such a way that they have close contact with their customers

Question 36

Give 3 advantages to customer grouping

Answer 36

Customers needs are identified as a priority so customer loyalty can be built up

Services can be tailored to suit each group of customers or specific customer

The organisation can respond much faster to the customers needs

Question 37

Give 3 disadvantages of customer grouping

Answer 37

There can be large staffing costs

The feeling of personal service can be lost if staff change positions

Administration of such a grouping can be time consuming as individual customer needs take time and effort to meet

Question 38

What is geographic grouping?

Answer 38

When businesses organise themselves around the place where their products are delivered

Used when customers are spread out over many countries or a wide area of a country

Question 39

Give 3 advantages of place grouping

Answer 39

Local offices with local knowledge can cater for local clients needs

Customer loyalty can be built up through a local personal service

The local office is more responsive to changes in customer needs

Question 40

Give 3 disadvantages of place grouping

Answer 40

Administration can be time consuming

There will be a duplication of personnel and resources

It is expensive with regards to administration and staffing costs

Question 41

What is technology grouping?

Answer 41

When activities are grouped around the technological requirements of the product, mostly in its manufacture or in the process of delivery to the customer

Question 42

Give 3 advantages of technology grouping

Answer 42

The degree of specialisation in the production process can be increased

Problems with the technology can be easily identified

It can reduce wastage and costs

Question 43

Give 3 disadvantages of technology grouping

Answer 43

There is a high degree of specialised training of the staff required

Duplication of resources occurs

It is only an option for very large organisations that have different products with similar production processes