UB - Organisational Structures and Grouping Flashcards
What is functional grouping?
Grouping activities by department. People working in these departments will have a similar interest.
Advantages of functional grouping (4)
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
Disadvantages of functional grouping (4)
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
What is product/service grouping?
When each department focuses on one product the business sells
Advantages of product/service grouping (3)
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
Disadvantages of product/service grouping (3)
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
What is customer grouping?
Grouping by market segment or target market
Advantages of customer grouping (4)
High level of personalised service to customer
Customer loyalty increased
Higher customer satisfaction
Very responsive to customer needs
Disadvantages of customer grouping (3)
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
What is geographical grouping?
When departments are based on different locations the business operates in
Advantages of geographical grouping (4)
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
Disadvantages of geographical grouping (2)
More expensive as support services are duplicated
Disagreement over which department should receive the most support
What is technological grouping?
When businesses group based on each production activity.
Advantages of technological grouping (4)
Staff can become very specialised
Problems can be found very easily if something goes wrong
Disadvantages of technological grouping (2)
More expensive as support services are duplicated
Disagreement over which department should receive the most support
What is a tall/hierarchical structure?
When the business has several layers of management with responsibility increasing going upwards. Associated with a narrow span of control.
Advantages of tall/hierarchical structure (4)
More chances of promotion
Employees have clearly defined roles and responsibilities
Specialisation of tasks is common
Disadvantages of tall/hierarchical structure (1)
Communication and decision making can take a long time
What is a flat structure?
When the business has few layers of management. Associated with wide span of control
Advantages of a flat structure (2)
Communication and decision making is quick
Cuts costs as there are fewer managers
Disadvantages of flat structure (2)
More people the manager has control over so more stress
Less chance of staff promotion
What is a matrix structure?
Used for a project and consists of a team of staff from different departments with different skills and knowledge
Advantages of a matrix structure (2)
Good way to solve complex problems
Gives staff chance to work in a team - motivates them
Disadvantages of a matrix structure (2)
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
