Unit 1 - Structure And Decision Making INCOMPLETE Flashcards
What are the advantages of a tall structure?
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
What are the disadvantages of a tall structure?
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
What are the advantages of a flat structure?
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
What are the disadvantages of a flat structure?
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
What is delayering?
What are advantages of delayering?
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 is called delayering.
Save the company money on managerial wages
Make the business more responsive to change due to the reduction of layers of management
What is downsizing?
What are advantages of downsizing?
Downsizing is when a firm closes down or merges aspects of their operations.
Reduce costs
Remain competitive in the marketplace
What are centralised organisations?
What are advantages of centralised organisations?
What are the disadvantages of centralised organisations?
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.
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.
What are decentralised organisations?
What are advantages of decentralised organisations?
What are the disadvantages of decentralised organisations?
Decentralised organisations delegate authority down the chain of command. Each department within the organisation has the authority to make their own decisions.
Advantages
reduces the speed of decision-making.
Employees will be more motivated as they are given the opportunity to make decisions and be creative.
The business will be more responsive to changes in individual/local markets as staff in each department have a greater local knowledge.
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.
What is a matrix structure?
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.
What are the advantages of a matrix structure?
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
What are the disadvantages of a matrix structure?
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)
What is an entrepreneurial structure?
Entrepreneurial structure is used in SMEs. 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.
What are the advantages of an entrepreneurial structure?
Decisions are often made quickly by the entrepreneur who is experienced within the business.
What are the disadvantages of an entrepreneurial structure?
There is a workload issue for the decision makers as responsibility for many tasks will fall to them.
What is functional grouping?
Grouping by department and people working in these departments have similar interests. People can contact specific departments if they require specialist advice/help. Marketing may contact HR when recruiting new staff.
