U1- Structures Flashcards
Describe a flag structure (3 things)
There are fewer levels of management
There is a short chain of command
Managers have a wider span of control
Give 3 advantages to a flat structure
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
Give 2 disadvantages to a flat structure
The removal of management/ supervision levels means that there is less control throughout the organisation
Mistakes are easier to make and harder to identify
Describe a hierarchical (tall) structure (name 3 things)
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
Give 4 advantages of a hierarchical structure
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
Give 3 disadvantages to a hierarchical structure
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
Describe an entrepreneurial structure (name 3 things)
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
Give 4 advantages of an entrepreneurial structure
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
Give 3 disadvantages to an entrepreneurial structure
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
Describe a matrix structure (name 3 things)
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
Give 4 disadvantages of a matrix structure
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
Give 2 disadvantages of a matrix structure
Employees will have 2 managers to report to: their function manager and the matrix
Matrix structures can be costly to set up and manage
Describe a centralised structure (name 2 things)
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
Give 4 advantages of a centralised structure
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
Give 3 disadvantages to a centralised structure
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
Describe a decentralised structure (name 3 things)
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
Give 4 advantages to a decentralised structure
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
Give 3 disadvantages to a decentralised structure
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
What is de-layering?
The removal of levels of management or supervision from the organisation
What are the consequences of de-layering? Name 4
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
What is the span of control?
The number of people any manager or supervisor has working directly for him or her
Give 3 advantages to a wide span of control
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
Give 3 disadvantages of a wide span of control
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
What is downsizing?
It involves reducing the operating costs of the organisation by looking for what it does not need to spend money on
What are 2 advantages to downsizing?
Reduces the costs for the organisation making it more efficient and competitive
Increases shareholders confidence
What are 2 disadvantages to downsizing?
Possible bad publicity
Redundancy costs
Name 6 factors which impact on the structure the organisation uses
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
What is a mix of groupings called?
A hybrid structure
What is functional grouping?
When the organisation is split into departments which represent the main functional areas of the business
Give 4 advantages to functional grouping
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
Give 3 disadvantages to functional grouping
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
What is product/ service grouping?
When the organisations activities are grouped around the different products or services that it provides
Such as Virgin
Give 4 advantages to product grouping
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
Give 2 disadvantages to product grouping
Divisions may find themselves competing against each other
It is difficult to share research and development or equipment across divisions
What is customer grouping?
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
Give 3 advantages to customer grouping
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
Give 3 disadvantages of customer grouping
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
What is geographic grouping?
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
Give 3 advantages of place grouping
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
Give 3 disadvantages of place grouping
Administration can be time consuming
There will be a duplication of personnel and resources
It is expensive with regards to administration and staffing costs
What is technology grouping?
When activities are grouped around the technological requirements of the product, mostly in its manufacture or in the process of delivery to the customer
Give 3 advantages of technology grouping
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
Give 3 disadvantages of technology grouping
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
