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Higher Business management > Unit 1 outcome 1.3 - business structures > Flashcards

Unit 1 outcome 1.3 - business structures Flashcards

1
Q

What are the 4 different types of business structure?

A
  • Hierarchical (tall) structure
  • flat structure
  • matrix structure
  • entrepreneurial structure
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2
Q

What is a hierarchical structure?

A
  • Traditional structure for many medium and large organisation, sometimes called a pyramidal structure.
  • Decisions and instructions are passed down from the senior staff to the workforce, and information passes back up
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3
Q

What does Specialisation in a tall structure allow?

A

Allows the organisation to benefit from economies of scale in its operations

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4
Q

What are the 3 types of decisions within a tall structure?

A
  • operational decisions
  • Tactical decisions
  • Strategic decisions
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5
Q

What are 2 advantages of a Tall structure?

A
  • the structure is clearly defined and each member of staff knows their role and who to report to
  • with many levels come many promotion opportunities which can motivate staff
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6
Q

What are 2 disadvantages of a Hierarchical structure?

A
  • Communications take time to flow down through the levels, which slows down decision-making
  • The organisation can be slow to react to changes in the market
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7
Q

What is a flat structure?

A

When there are very few levels in the hierarchy, so communications are passed quickly from one level to another, speeding up the processing of information and decision-making

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8
Q

What are 2 advantages of a flat structure?

A
  • information can be communicated quickly between levels

- the organisation can respond quickly to external factors such as competition

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9
Q

What are 2 disadvantages of a flat structure?

A
  • Fewer levels means fewer promotion opportunities so quality staff may leave to gain promotion in larger organisations
  • As there are less management levels, staff may be delegated more tasks, which could put them under pressure
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10
Q

What is a matrix structure?

A

This emphasises getting people together who have particular specialist skills and placing them in project teams to complete specific tasks.
There is no hierarchy

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11
Q

What are 2 advantages of the matrix structure?

A
  • Each team has specialised staff from all functional areas

- Complex problems can be solved

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12
Q

What are 2 disadvantages for the matrix structure?

A
  • many managers across all project teams will mean high wage costs
  • Duplication of resources such as administration staff and equipment for each project team.
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13
Q

What is an entrepreneurial structure?

A

A structure common in small businesses, where decisions have to be made quickly

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14
Q

What are 2 advantages of an entrepreneurial structure?

A
  • Decisions are made quickly as there is little consultation
  • Staff know who they need to report to
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15
Q

Name 2 disadvantages of an entrepreneurial structure?

A
  • This structure can create a heavy workload for the main decision maker
  • If the owner is busy or not available, key decisions can’t be made
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16
Q

What is centralised management?

A
  • when the control and decision-making lies with the most senior directors or managers or the owners of the organisation
  • decisions start at the top, and they are passed down to the workforce
  • subordinates have no authority
17
Q

What are 3 advantages of a centralised management?

A
  • procedures are standardised which ensures consistency
  • there is low risk of important information leaking from branches or departments
  • a high degree or corporate identity and strategy exists as decisions are made for the whole organisation
18
Q

What are 3 disadvantages of a centralised management?

A
  • Less responsibility is given to subordinates which can result in demotivated staff
  • Decisions will not reflect the needs of local markets
  • the organisation will react slowly to external factors such as competition
19
Q

What is decentralised management?

A
  • decision-making and control are delegated to and carried out by subordinates, relieving senior management
  • decisions are made throughout the lower end
20
Q

Name 3 advantages of decentralised management?

A
  • The business reacts quickly to external factors
  • decisions are made quickly as local managers don’t need to consult senior managers before implementing decisions.
  • More subordinates are empowered which encourages creativity
21
Q

Name 2 disadvantages of decentralised management?

A
  • the organisation can lose an overall corporate image if each department/branch is operating differently
  • local branches could start to compete with each other if they are allowed to make key decisions
22
Q

Why do organisations change their structure overtime?

A

to ensure that they can cope with changing circumstances

23
Q

What are the two steps businesses can be forced to make to become more competitive and to survive the worst of a recession?

A
  • De-layering

- Down sizing

24
Q

What is de-layering?

A

The cutting out of levels of management within the organisation in order to ‘flatten out’ the structure

25
Q

What does de-layering overcome?

A

the effects of aggressive competition in the market place

26
Q

Name 3 advantages of de-layering;

A
  • money is saved on paying expensive management salaries
  • quicker decision-making and communications are possible as there is a shorter chain of command
  • there is a wider span of control
27
Q

What are 3 disadvantages of delayering?

A
  • there are fewer promotion opportunities for staff
  • redundancy payments will cost the organisation a significant amount of money
  • the organisation will lose key members of staff in the restructure
28
Q

Why do organisations use down-sizing? and how?

A

to attempt to reduce costs

  • reducing the scale of their operations to meet actual market demand
  • stripping out excess capacity within the organisation (at all levels and within all functions)
  • consolidating complimentary operations under one function
  • reducing the resources of the organisation following increases in productivity
29
Q

What does down-sizing mean? (3)

A
  • the closure of factories or production units
    or
  • merging two or more separate operations under separate management functions and bring them together under one management umbrella
    or
  • scaling down of their production capacity
30
Q

What are 2 advantages of down-sizing?

A
  • cost of wages and rent will be reduced

- the business is more efficient and can become more competitive

31
Q

Name 2 disadvantages of down-sizing?

A
  • valuable skills and knowledge are lost when redundancies ae made
  • remaining staff feel vulnerable and are demotivated
32
Q

What do organisational charts show?

A

The structure of the organisation in diagrammatic form where individuals are identified in specific positions within the organisation, showing their links to others along lines of authority and responsibility

33
Q

Name 3 advantages of organisational charts?

A
  • each individual can be names in the position they hold, providing clear identification
  • they identify appropriate lines of communication or where bottlenecks occur
  • they identify the span of control or number or subordinates each individual has
34
Q

Name the 2 disadvantages of organisational charts:

A
  • they don’t show how much authority each position in the chart carries
  • they don’t identify any informal relationships that occur
35
Q

What is the span of control?

A

the number or workers or subordinates under a supervisor or manager

36
Q

name 2 important factors considered when deciding on the span of control of any manager or supervisor?

A
  • the calibre and ability of the manager or supervisor must be considered as some people are better at managing and leading as others and therefore can cope with a larger number of subordinates
  • the calibre and ability of the subordinates must be considered as intelligent, motivated and able subordinates will need little in the way of control, and therefore a superior can manage a relatively large number of people. The same will not be true if subordinates are lazy, demotivated or less able.
37
Q

What are the 3 types of relationships within a business?

A
  • line relationships
  • functional relationships
  • staff relationship

Higher Business management (4 decks)

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