1. Management Structures

Question 1

Management Structure?

Answer 1

Management structure - refers to the layout or internal framework of an organization that demonstrates how management is linked to the organization and how authority is transmitted.

Management structures outline the way a large-scale organization is organized in terms of its management hierarchy.

The management structure of an organization is the way in which its parts have been organized so that the organization can achieve its objectives.

Question 2

Level + Specialised Roles?

Answer 2

Top Management
Strategic planning; monitoring of whole organisation.

Middle Management
Operational Planning; supervision of lower management.

Lower Management
Front-line planning; supervision of operations

Operations
Works/functions

Question 3

Characteristics of Normal management Structures?

Answer 3

Characteristics of this pyramid shaped management structure are:
 Rigid Lines of management
 Numerous levels of management
 Hierarchical information flow downwards
 Centralised control with all decisions made by senior management

Question 4

why Structures are important ?

Answer 4

Structures are important because they allow stakeholders to know:
• The way that communication flows within the organization
• The possibility of career paths
• The hierarchy of positions within the organization

Question 5

Management of Internal Structure of an organisation?

Answer 5

• The effective management of the internal environment strongly influences an organisation’s chances of achieving its objectives.

•	The elements of the internal environment are:
■ management structures
■ corporate culture
■ key management roles
■ policy development
■ management styles
■ management skills
■ ethical management.

It is through these elements of the internal environment that management implements strategies and plans aimed at achieving organisational objectives.

Question 6

Structure follows strategy?

Answer 6

• Every large corporation needs a formal structure to coordinate work activities and to set out the roles and responsibilities of members of the organisation.
• This formal structure is frequently represented as an organisational chart.
• In general, organisational strategy determines organisational structure.

 It is logical that structure should serve strategy.

 Without a close fit between strategy and structure, serious inefficiencies will result.

 An organisation’s structural design should be evaluated against the purposes it is intended to serve.

Question 7

Bureaucracy?

Answer 7

Bureaucracy is the combined organizational structure, procedures, protocols, and set of regulations in place to manage activity, usually in large organizationsIt is a group of non-elected officials within a government or other institution that implements the rules, laws, ideas, and functions of their institution.

Bureaucratic structures‐ applied to structures where there are many levels of management and a clear vertical hierarchy.

The Weberian characteristics of bureaucracy are:
■ clearly defined roles and responsibilities
(i.e. division of labour, specialisation)
■ a hierarchical structure
(i.e. a pyramid-like structure with greatest authority at the top)|
■ Reliance on established rules and procedures within the organisation
■ Respect for merit
(as opposed to seniority which was valued in Weber’s time)
■ Motivation based on a sense of duty and career prospects.

 Many government organizations operated with structures based on a strict Weberian model.

 Usually this term relates to those structures in which there are many levels of management and a clear vertical hierarchy.

Question 8

Organisational Patterns

Features of organisational structures?

Answer 8

Division of Labour (specialisation)
Departmentalisation
Authority and responsibility
Line Authority:
Delegation:
Chain of command:
Unity of command
Communication flow:

 The clearest patterns are seen in an organisation’s vertical and horizontal specialisation. All large organisations apply the ideas of both vertical and horizontal specialisation in their structures.

 Many use a mixture of forms of horizontal specialisation in one structure (for example, departmentation by function, product and geography).

Question 9

Organisational Patterns
Features of organisational structures

Division of Labour (specialisation)?

Answer 9

• Refers to how work is broken up within an organisation

* People specialise in a particular part of the process or activity rather than doing the whole activity

Question 10

Organisational Patterns
Features of organisational structures

Departmentalisation?

Answer 10

• Process of grouping tasks or activities

* Strategic business units, divisions, sections, teams to lead, co‐ordinate and control the activates of the department

Question 11

Organisational Patterns
Features of organisational structures

Authority and responsibility?

Answer 11

Authority:
• Formal right attached to a position that allows the holder to give commands and expects them to be carried out
Responsibility:
• Obligation to ensure tasks are performed
• Responsible people make sure things get done either by themselves or making sure others do them

Question 12

Organisational Patterns
Features of organisational structures

Line Authority:?

Answer 12

• Authority attached to the primary tasks of the organisation
• Line managers have the authority to direct the people on their line

Question 13

Organisational Patterns
Features of organisational structures

Delegation:?

Answer 13

• assigning of a task, authority or responsibility to a sub ordinate

Question 14

Organisational Patterns
Features of organisational structures

Chain of command:?

Answer 14

For every employee, there should be a line of authority, traceable to the highest level of management in the organisation.

Question 15

Organisational Patterns
Features of organisational structures

Unity of command?

Answer 15

that a subordinate has only one person to whom he or she is directly accountable
Span of control:
• Number of people supervised by one manage

Question 16

Organizational Patterns
Features of organizational structures

Communication flow:?

Answer 16

• Formal‐ oral written • Informal‐ can take place anywhere
• Purpose‐ to inform, order, advice, instruct, co‐ordinate, persuade or motivate
• Content‐ subject matter, language, images, conveyed/structure
• Directional flow‐ vertical, lateral with each being formal or informal

Question 17

Organizational Patterns

Vertical specialisation?

Answer 17

Vertical specialisation refers to the hierarchy of formal authority and decision making power within the organisation. It is the organisation’s chain of command.

 In relation to vertical specialisation, the main differences between organisations are found in the extent to which decision-making power is centralised at the top or decentralised throughout the organisation.

Question 18

Organizational Patterns

Horizontal specialisation?

Answer 18

Horizontal specialization refers to the division (or grouping) of people and resources within the organisation. In management theory it is usually known as departmentation.

Departments (sometimes called divisions, sections or branches) can be organised on the basis of:
■ function
■ division
■ matrix.

Functional model In the functional model, staff are organised in various departments based on organisational functions, such as production, human resources, finance, and marketing.\

Divisional model In the divisional model, staff are organised in departments based on division. The likely divisions are: product, service, customers, geography (region), or type of legal business entity.

Matrix model The matrix (or grid) model combines specialisation by function and division. It arose in situations where neither the functional nor the divisional form of specialisation was appropriate.

 Allows specialisation by project while each member of staff remains part of a department based on function.

 In the matrix model, all staff are assigned to both a function department and a project.

 Even though there is the disadvantage of possible conflicts over lines of authority, the matrix structure has proved useful in very complex and fast moving business activities.

 Because the focus of projects can be readily changed, the model promotes both teamwork and flexibility.

Question 19

Types of Management or organisational Structures

Simple Structure?

Answer 19

• A type of organisational structure in which there are only two layers or levels.
• A simple structure best suits a small or micro business where there are few employees.

Positive Aspects:
 Simplicity of management means the manager has close contact with the employees
 There are few avenues for communication blockages or barriers as there are only two levels to communicate between

Difficulties:
 The manager would need to have a wide level of knowledge and ability in different functional areas.
 There are no career path options for employees

Question 20

Types of Management or organisational Structures

Geographic Structure?

Answer 20

• Represent those where the business is conducted in several different locations.
• Each location would have a certain form of structure, depending on the size and needs of the organisation.
• Each geographic branch could have its own structure: functional, divisional, matrix or organic.
• A geographic structure best suits multinationals or TNCs and large organisations.

Positive Aspects:
 Allows LSOs access to wider markets
 It allows LSOs to better handle local laws if it has a regional branch
 Follow the Sun method—large project passed around unrestricted by time zones.

Difficulties:
 Different languages can cause communication problems
 Time can be wasted if senior management has to travel between branches
 Control can be lost or diminished as senior management cannot be everywhere

Question 21

Types of Management or organisational Structures

Functional Structure?

Answer 21

• Is where the organisation is split according to the function or work performed by the people in that area of management function/area.
• Managers are assigned to ensure the smooth running of that managemental area.
• Functional structures can be at one location or in several.
• Best suits medium-to-large organizations

Positive Aspects:
 There is a specialist in charge of each functional area, allowing for greater expertise, efficiency and productivity.
 Issues can be resolved within a functional area of management

Difficulties:
 The structure relies on the different functional managers communicating with each other.

Question 22

Types of Management or organisational Structures

Divisional Structure?

Answer 22

• Has the same foundations as a functional structure, but each functional area is further divided into subsections, with a separate manager for each.
• Only suitable for especially large organisations; if business is too small, it may have too many managers.

Positive Aspects:
 There are specialists in charge of small sections of the organisation; allowing for optimum practice in each area
 Room for career advancement

Difficulties:
 The chances of difficulties in communication become more pronounced.
 Only works well if if clear communication channels are established within and between functional areas.

Question 23

Types of Management or organisational Structures

Matrix Structure?

Answer 23

• Consists of a team approach to separate projects—representatives from each functional area oversee their concerns within each project that is operating at one time.
• Suits LSOs that work on several different projects at once, or do work for different clients at the same time.

Positive Aspects:
 Control is decentralized; ensuring better monitoring of all aspects of a job
 Many opportunities for vertical and horizontal career paths

Difficulties:
 Because of complexity, communication can become difficult
 There may be staffing issues when one project finishes if there is not another to begin immediately.

Question 24

Types of Management or organisational Structures

Organic Structure?

Answer 24

• This structure has its core business maintained by employees, with non-core business maintained by employees, with non-core functions outsourced; that is, hiring another firm to complete some tasks for an organisation.
• May involve hiring consultants who are experts in a particular field to come in and give advice or complete a task.
• Suits firms who do not want to stray too far from their purpose as stated in their missions.

Positive Aspects:
 Money is not wasted on employing people all year when work may only be required occasionally
 Outsourcing firms may assist in keeping a company accountable and responsible

Difficulties:
 Firms under contract may not have a good understanding of the values and the missions of the core business
 Some control is lost when other businesses are completing work

Question 25

Types of Management or organisational Structures

Bureaucratic Structure?

Answer 25

• Hierarchical structure with many levels and a distinct chain of command, with senior management up the top and employees down the bottom.
• Associated with autocratic management styles.
• There is a clear division of tasks and centralised decision

Positive Aspects:
 Strict policy ensures hard and constant work, and employees are well aware of their role.

Difficulties:
 Communication doesn’t flow to all levels
 Management cannot be communicated with much by lower subordinates.
 Lack of team work
 and difficult for career advancement.

Question 26

Types of Management or organisational Structures

Optimising Structure?

Answer 26

• An organisation seeks the optimum structure, that is, the structure that best assists the organisation in its strategy to achieve its objectives.
• There may be many aspects to be considered in deciding on that optimum.

Consider the different organizational structures appropriate to strategies of:
Innovation: Requirement for flexibility and free flow of information
Cost: minimization Requirement for efficiency, stability and tight control

Any proposed changes to the existing structure of a large organization must have a view to:
■ clearly setting out roles and lines of authority, so as to avoid duplication of effort and conflict over authority.
■ providing the appropriate amount of control over staff
■ maintaining effective communication and information flows.
■ assessing the advantages of the proposed change against the costs of implementation

Question 27

Types of Management or organisational Structures

Difference between tall and flat structures?

Answer 27

Tall structures have:
•	Many layers of management
•	More people have responsibility
•	Opportunities for promotion
•	Manager responsible for few people
•	Leads to authoritarian culture
•	Long lines of communication – top out of touch with bottom

Flat structures have:
•	Fewer layers of management
•	More responsibility for each manager
•	Emphasis on team work and working independently 
•	Improved communication flow

Question 28

Types of Management or organisational Structures

Strategies in Structure?

Answer 28

Strategies in Organizational Structure
o Changing from a vertical hierarchy to a horizontal structure from tall to flat structures
o Changing the organizational structure from functional to divisional, divisional to geographical
o De-layering – cutting out layers of middle management

How structures have evolved over time:
1. Downsizing
This means the organizations becomes smaller, a by‐product of downsizing has also been a flatter organizational structure with fewer middle management positions

2. Rightsizing
   The different to downsizing, is that it sometimes makes the organization bigger. It involves the business eliminating the non‐core areas of its operations, and concentrating on the areas that it does best.