Unit 1 KA8- Structures

Question 1

What are the two types of organisation structures?

Answer 1

Tall and flat organisation

Question 2

Explain tall (hierarchical) structures

Answer 2

A hierarchical or ‘tall’ structure has many leaders and layers of management.
Businesses with this structure often use a ‘top-down’ approach with a long chain of command .
In a hierarchical structure, managers will have a narrow span of control and a relatively small number of subordinates or staff.

Question 3

Explain flat structures

Answer 3

A flat organizational structure means that an organization has few (if any) levels of management between the workforce and the highest-level managers.
The absence of middle managers places more authority, such as decision-making functions, at the worker level.

Question 4

Explain the advantages and disadvantages of tall organisation structures

Answer 4

Advantages
more opportunities for promotion which can lead to greater staff motivation
staff gain more support from their line manager
there is a higher degree of supervision as each line manager has a limited number of people they are responsible for

Disadvantages
many levels of hierarchy
span of control is narrow, and the chain of command is long, making communication slower as instructions take longer to travel through the levels of the organisation
longer lines of communication can make the firm less responsive to change
can be expensive to run due to high wage costs

Question 5

Explain the advantages and disadvantages of flat organisation structures

Answer 5

Advantages
few levels of hierarchy
lines of communication are short, making the firm responsive to change and decision-making quicker
staff working in a flat management structure can be empowered to work independently and take on more responsibility

Disadvantages
wide span of control means that tasks must be delegated, which can lead to employees feeling stressed and managers feeling overstretched
less promotion opportunities within a flat structure, which may lead to the company losing staff to other organisations

Question 6

Explain the advantages and disadvantages of flat organisation structures

Answer 6

Advantages
few levels of hierarchy
lines of communication are short, making the firm responsive to change and decision-making quicker
staff working in a flat management structure can be empowered to work independently and take on more responsibility

Disadvantages
wide span of control means that tasks must be delegated, which can lead to employees feeling stressed and managers feeling overstretched
fewer promotion opportunities within a flat structure, which may lead to the company losing staff to other organisations

Question 7

What is delayering and what does it do?

Answer 7

Within hierarchical structures a method that can be used to reduce costs is to remove a layer of management, while expecting staff to produce the same level of output. This can:

Save the company money on managerial wages
Make the business more responsive to change due to the reduction of layers of management

Question 8

What is downsizing and what does it do?

Answer 8

Downsizing is when a firm closes down or merges aspects of their operations in order to:

Reduce costs
Remain competitive in the marketplace

Question 9

What are the two types of organisation structures?

Answer 9

Centralised and decentralised

Question 10

Explain centralised organisation structures?

Answer 10

Centralised organisations are where most decisions are taken by senior managers and then passed down the organisational hierarchy. This structure relies on having strong and competent managers.

Question 11

Explain the advantages and disadvantages of centralised structure?

Answer 11

Advantages
Centralised management structures can lead to greater uniformity within the organisation as each branch of the business will be using standardised procedures.

Disadvantages
Centralised organisational structures are often less responsive to localised external pressures. It can also lead to demotivated staff who are not being given the opportunity to be involved in the decision-making process.

Question 12

Explain decentralised organisation structures?

Answer 12

Decentralised organisations delegate authority down the chain of command, thus reducing the speed of decision-making.
Each department within the organisation has the authority to make their own decisions.

Question 13

Explain the advantages and disadvantaged of decentralised organisation structures?

Answer 13

Advantages
The business will be more responsive to changes in individual/local markets as staff in each department have a greater local knowledge.
Employees will be more motivated as they are given the opportunity to make decisions and be creative.

Disadvantages
Overall control of the organisation is delegated to departmental managers. This may lead to poor decisions as branch managers may not be as experienced as the managers in the head office. Individual branches may begin to compete and the overall corporate culture may be harder to develop.

Question 14

What is a matrix structure?

Answer 14

Matrix structure is often used when cross functional teams are created to run a project. Team members may come from different disciplines.
The team will disband when the project is complete.

Question 15

What does cross functional mean?

Answer 15

A system whereby people from different areas of an organization work together as a team.

Question 16

What are the advantages and disadvantages of matrix structures?

Answer 16

Advantages
A good way of having different viewpoints and skills involved in a project
provide staff with an opportunity to learn new skills from other members of The team which may lead to greater motivation and productivity

Disadvantages
It is very expensive
team members may have priority issues when having to report to two bosses (their regular line manager and their project leader)

Question 17

What is an entrepreneurial structure?

Answer 17

Entrepreneurial structure is used in SMEs (small-medium enterprises).
This is when the major decisions are made by one or two key personnel. Usually in small businesses this will be the owner or the entrepreneur.

Question 18

What are the advantages and disadvantages of entrepreneurial structures?

Answer 18

Advantage
Decisions are often made quickly by the entrepreneur who is experienced within the business.

Disadvantage
There is a workload issue for the decision makers as responsibility for many tasks will fall to them.

Question 19

What is functional grouping?

Answer 19

Functional grouping is a company structure with a board of directors overseeing a chief executive managing different departments

This is the traditional method of organising a firm into departments based on their core activities such as marketing or finance. This means that staff with similar expertise work together.

Question 20

What are the advantages and disadvantages of functional groupings?

Answer 20

Advantages
Brings together employees with similar skills allowing expertise to develop.
Less duplication of resources

Disadvantages
Can lead to slow decision making and poor communication
Can become unresponsive to external changes in the market