1.4.3 - Organisational Design

Question 1

Definition of organisational design

Answer 1

Refers to a diagram or chart which shows the lines of authority and layers in the hierarchy of the business.

Question 2

What is a hierarchy?

Answer 2

Is a system in a business where employees are ranked due to their status and authority.

Question 3

What is the chain of command?

Answer 3

Chain of command in a business is the flow of information, power and authority through the organisation. Closer to the top = more power.

Question 4

What is span of control?

Answer 4

This is a number of subordinates they can delegate to.

Question 5

What is decentralisation?

Answer 5

Is where the business divides up the organisation into areas, for example north, east, south, west or UK, Europe and Africa. The business will have separate budgets for each area.

Question 6

What is centralisation?

Answer 6

Is where a business has its organisation of management and administration at one central head office, the business has one centralised budget.

Question 7

What does an organisational chart show?

Answer 7

Names of departments, job roles, responsibilities and accountability, lines of authority, lines of communication flow, chain of commands.

Question 8

What are the three types of organisational structure?

Answer 8

Tall, flat and matrix

Question 9

What are some characteristics of a tall organisational structure?

Answer 9

Lots of opportunity’s for promotions, information takes a long time to get from the bottom to the top, long time for decisions to be made, work is shared along more people so less stress, everyone knows where there are so its well organised and very orderly.

Question 10

Advantages of a tall organisational structure.

Answer 10

Supervisors usually have a small span of control so learn their subordinates better, knowing their subordinates well means they can better delegate tasks and make sure they are all well trained, more opportunities, staff can easily been closely monitored.

Question 11

Disadvantages of a tall organisational structure.

Answer 11

Lots of layers and a long chain of command causing the business to be very inflexible, communication is slow, expensive way to structure a business as there are more supervisors and managers.

Question 12

What are some characteristics of a flat organisational structure?

Answer 12

Wide span of control, short chain of command, information flows quickly through the organisation.

Question 13

Advantages of a flat organisational structure.

Answer 13

Fewer layers of hierarchy between the bottom and top so fast communication, lots of delegation so staff are given more responsibilities which may mean more opportunities to use their abilities.

Question 14

Disadvantages of a flat organisational structure.

Answer 14

Staff can become overstretched or overworked due to less supervision (causes stress and loss of motivation), can create power struggle if the manager is rarely around as subordinates jostle for roles and responsibilities, wide span of control so managers may have to many staff to manage and may lose touch with them.

Question 15

What is a matrix organisational structure?

Answer 15

Is where a business works on multiple products/projects at the same time, a matrix structure is more appropriate than a standard hierarchy.

Question 16

Advantages of a matrix structure.

Answer 16

Very flexible structure, means staff from different departments can easily jump in and out of different job roles, perfect to exploit the specific skills of staff.

Question 17

Disadvantages of a matrix structure.

Answer 17

There may be possible co-ordination problems between departments, employees can have conflicts of interest across projects, staff can become stretched across different projects therefore not spending time in their own departments.