Unit 2: Types of Organization Flashcards
What is a flat (horizontal) organization?
A flat organization has a few layers of management, a wide span of control and a short chain of command
What is the chain of command in a flat organization?
A short chain of command, with fewer levels of management between top leadership and employees.
What is the span of control in a flat organization?
The span of control is wide, meaning managers supervise a large number of employees.
What types of organizations typically use a flat structure?
start up businesses, small organizations and organizations that value creativity and flexibility
How does a flat structure affect communication?
it improves communication by reducing the number of management layers
What is a disadvantage of a wide span of control in flat organizations?
can be difficult for managers to effectively supervise employees. (wide span of control)
What is the organizational culture like in flat structures?
Open, informal and encourages creative
How does a flat structure change as an organization grows?
It often becomes more formally structured and shifts to a tall (vertical) structure with more layers of management and narrow span of control
What are the advantages of a flat organization?
Improved communication.
Encourages creativity and flexibility.
Greater decision-making authority for managers.
What are the disadvantages of a flat organization?
Difficult to supervise employees due to the wide span of control.
Informal culture may lead to unclear responsibilities.
What is a Tall Organization?
An organization with many layers of management in its hierarchy, where CEO’s at the top have more authority and responsibilities than
lower ranked employees
What is the structure of a tall organization?
- CEO at the top.
- Senior managers below the CEO.
- Low-ranked employees with minimal responsibilities at the bottom.
Where are tall structures commonly used?
Large Business, central governments and the military.
What are the characteristics of tall organizations?
- Highly formal and bureaucratic
- Long chains of command
- Narrow Span of control for managers
- Ridgid and inflexible structures
What are the advantages of tall structures?
- Clear lines of accountability.
- Better control by senior managers.
- Motivational for employees due to promotion opportunities.
What are the disadvantages of tall structures?
- slow decision making due to long chain of command
- risk of miscommunication
- bureaucratic and unvalued employees
What is organization by product?
structuring the workforce based on goods or services sold, with departments focusing on specific product lines
Which types of businesses use organization by product?
Large businesses with broad product portfolio such as Ford and Volkswagen and publishing firms like Holder education
What are the advantages of organization by product?
- Encourages specialization in market segments
- Helps meet customer needs more effectively
- Improves product knowledge and marketing activities
- Encourages internal competition between departments
What are disadvantages of organization by product
- Duplication of work
- Miscommunication between departments
- Higher resource requirements to maintain separate divisions
Why is organization by product suitable for large businesses?
it allows specialization and focus on different product lines within a broad portfolio, which improves efficiency and meets customer needs
What is organization by function?
A structured workforce based on a businesses function such as marketing, Human Resources, production and finance
Who is in charge of each functional department?
A manager or direction is responsible for overseeing the functional area
What type of businesses is organization by function most suitable for?
Small businesses that focus only on one product or small numbers of goods or services
What is the main advantage of organization by function?
Roles and tasks are preformed by experts, ensuring high productivity and outcomes
What is a major drawback of organization by function?
Departments are often isolated, focusing only on their area of responsibility which limits collaboration
What is organization by function
Structuring a workforce according to the geographical areas which it operates in.
What type of businesses typically use organization by region?
Large business that have multiple operations in different locations like multinational companies
How does organization by region benefit businesses?
It allows business to better meet the needs of customers from different regions and leverage local knowledge
What is a real world example of organization by region?
McDonald’s has multiple regional offices operating management in North America, Asia, Middle East and Africa, adjusting tastes and preferences
