UB - Organisational Structures and Grouping

Question 1

What is functional grouping?

Answer 1

Grouping activities by department. People working in these departments will have a similar interest.

Question 2

Advantages of functional grouping (4)

Answer 2

Efficient use of resources as people can contact specific departments if they require specialist advice
Individuals develop in depth skills from one area of work
Individuals have clearly defined tasks
Career progress is often based on functional expertise

Question 3

Disadvantages of functional grouping (4)

Answer 3

Can promote internal rivalry
Communication between departments can be slow
Decision making can be slow as each department is consulted
Departmental aims can overtake the organisational aims

Question 4

What is product/service grouping?

Answer 4

When each department focuses on one product the business sells

Question 5

Advantages of product/service grouping (3)

Answer 5

Each product has its own specialised support
Management can more easily identify parts of the business that are not performing as well
Specialist knowledge and expertise can develop in each product in that department

Question 6

Disadvantages of product/service grouping (3)

Answer 6

There will be costly repetition of functional activities (e.g. resources)
There may be disagreement over which product should receive the most support
There may be rivalry between departments

Question 7

What is customer grouping?

Answer 7

Grouping by market segment or target market

Question 8

Advantages of customer grouping (4)

Answer 8

High level of personalised service to customer
Customer loyalty increased
Higher customer satisfaction
Very responsive to customer needs

Question 9

Disadvantages of customer grouping (3)

Answer 9

Can be more expensive because more staff are needed
Each department can only manage a limited number of customers
Harder to distribute support services such as financial support

Question 10

What is geographical grouping?

Answer 10

When departments are based on different locations the business operates in

Question 11

Advantages of geographical grouping (4)

Answer 11

Better able to meet the needs of different customers
Organisation can become familiar with local cultures and regulations
Specialist knowledge and marketing techniques can be used
Technology can be used to communicate with staff over distances

Question 12

Disadvantages of geographical grouping (2)

Answer 12

More expensive as support services are duplicated

Disagreement over which department should receive the most support

Question 13

What is technological grouping?

Answer 13

When businesses group based on each production activity.

Question 14

Advantages of technological grouping (4)

Answer 14

Staff can become very specialised

Problems can be found very easily if something goes wrong

Question 15

Disadvantages of technological grouping (2)

Answer 15

More expensive as support services are duplicated

Disagreement over which department should receive the most support

Question 16

What is a tall/hierarchical structure?

Answer 16

When the business has several layers of management with responsibility increasing going upwards. Associated with a narrow span of control.

Question 17

Advantages of tall/hierarchical structure (4)

Answer 17

More chances of promotion
Employees have clearly defined roles and responsibilities
Specialisation of tasks is common

Question 18

Disadvantages of tall/hierarchical structure (1)

Answer 18

Communication and decision making can take a long time

Question 19

What is a flat structure?

Answer 19

When the business has few layers of management. Associated with wide span of control

Question 20

Advantages of a flat structure (2)

Answer 20

Communication and decision making is quick

Cuts costs as there are fewer managers

Question 21

Disadvantages of flat structure (2)

Answer 21

More people the manager has control over so more stress

Less chance of staff promotion

Question 22

What is a matrix structure?

Answer 22

Used for a project and consists of a team of staff from different departments with different skills and knowledge

Question 23

Advantages of a matrix structure (2)

Answer 23

Good way to solve complex problems

Gives staff chance to work in a team - motivates them

Question 24

Disadvantages of a matrix structure (2)

Answer 24

Costly if many teams are required
Can be difficult to coordinate if the teams are in different parts of the organisation
Staff may end up having multiple managers, causing confusion

Question 25

What is an entrepreneurial structure?

Answer 25

When only a small number of people make the decisions in a business. Very autocratic style of decision making

Question 26

Advantages of an entrepreneurial structure

Answer 26

Decisions made quickly by the core team/individual.
Staff know who they are accountable to.
Decision-maker does not need to consult staff.

Question 27

Disadvantages of an entrepreneurial structure

Answer 27

Difficult to use in large businesses where many decisions have to be made.
It can create a heavy workload for decision-makers.
It can stifle other staff’s initiatives and motivations.

Question 28

What is delayering?

Answer 28

Removing layers of management from a business. Marking the structure flatter