1.4.3 - Organizational Design Flashcards
1
Q
What is organisational design
A
- Organisational design refers to a diagram or chart which shows the lines of authority and layers in the hierarchy of the business
2
Q
What is a hierarchy
A
- A hierarchy is a system in a business where employees are ranked due to their status and authority
- Traditionally those at the top of the hierarchy are more important than those at the bottom
- Employees during their career will seek to move up the hierarchy to improve their salary and working conditions
3
Q
What is span of control
A
- This is a number
- An employee that works as a Head of Department in a school may have 6 teachers working for them. Their span of control is therefore 6.
- This is the number of subordinates that they can delegate to
4
Q
What is decentralisation
A
- where a business divides up the organisation of its business into areas for example: north, south, east, west or UK, Europe, and Africa. The business will have separate budgets for each area
5
Q
What is centralisation
A
- where a business has its organisation of management and administration at one central head office. The business has one central shared budget
6
Q
What are the features of centralisation
A
- Less delegation, the management at Head Office will make all the key decisions
- All recruitment is carried out at head office, all accounts are made here - all decisions about product lines, sales, stock are made here
- Branches follow direction from Head office, for example they receive all deliveries of stock bought by the Head Office buying department team
- Only small decisions such as rotas and stock merchandising can be made at branch level
7
Q
What are the features of decentralisation
A
- Authority and power are given to the divisions to make decisions that affect that division, important when working in countries with different cultures
- The African division holds own budget and makes all decisions relevant to Africa
- The Europe division manages its own budget and makes all decisions relevant to Europe
- Quicker decisions can be made as they do not have to go through a central office for approval, this is
important in dynamic markets e.g. fashion
8
Q
What is a tall hierarchal structure
A
- In a tall structure there maybe lots of opportunity for promotion
- Information takes a long time to get from the bottom to the top of the organisation, it takes a long time for decisions to be made
- Work is shared among more people so less stress
- Everyone knows where they are in the hierarchy, so very orderly and organised
9
Q
What are the advantages of a tall hierarchal structure
A
- Supervisors normally have a small span of control so they can get to know their subordinates really well
- Knowing subordinates means they can delegate the right tasks and make sure their team is well trained
10
Q
What are the disadvantages of a tall hierarchal structure
A
- Lots of layers and a long chain of command can mean that the business is very inflexible
- It can also mean that communications within the organisation are slow
- This is expensive as there are more managers and supervisors
11
Q
What is a flat hierarchal structure
A
- Many restaurants and web design companies have a flat structure. They have a wide span of control and a short chain of command so information flows quickly throughout the organisation
12
Q
What are the advantages of a flat hierarchal structure
A
- Fewer layers of hierarchy between the bottom and the top of the organisation may mean that communication is fast
- Lots of delegation means that staff are given greater responsibility, which might mean more opportunities to use their abilities
13
Q
What are the disadvantages of a flat hierarchal structure
A
- Staff can be overstretched or overworked in a flat structure as there is less supervision, this can cause stress and demotivation
- Can create a power struggle if the manager is rarely around as subordinates jostle for roles and responsibilities
- Wide span of control means managers have too many staff to manage and may lose touch with them
14
Q
What is a matrix hierarchal structure
A
- In a business where there are more than one product or more then one project running at a time a matrix structure is more suitable than a standard hierarchy
- For example: Members of the production team sit on meetings for all 3 projects and advise on production matters – can it be built? Can it be built to the quality required? Have we got the materials to build it?
- Car manufacturers operate in this way, for example project 1 might be a design of a family car, project 2 a sports car and project 3 a 4x4.
15
Q
What are the advantages of a matrix hierarchical structure
A
- Matrix structure is ideal for a business that works on a project-by-project basis
- Very flexible structure means that staff from different
departments can jump in and out of different job roles - Perfect to exploit the specific skills of staff
