Chapter 12 (organisation)

Question 1

what is Organisational structure?

Answer 1

Organisational structure is the internal, formal framework of a business that shows the way in which management is organised and linked together and how authority is passed through the organisation

Question 2

what is The hierarchical (or bureaucratic) structure

Answer 2

This is one where there are different layers of the organisation with fewer and fewer people on each higher level. In general terms it is often presented as a pyramid.

Question 3

The hierarchical (or bureaucratic) structure order?

Answer 3

1 Chief Executive
2 Directors
3 Middle Managers
4 Supervisors
5 Line Workers

Question 4

The hierarchical (or bureaucratic) structure
Advantages?

Answer 4

1 The role of each individual will be clear and well defined
2 There is a clearly identifiable chain of command
3 This traditional hierarchy is most frequently used by organisations based on a ‘role culture’, where the importance of the role determines the position in the hierarchy

Question 5

The hierarchical (or bureaucratic) structure Disadvantages?

Answer 5

1 Such a structure tends to suggest that one-way (top downwards) communication is the norm – this is rarely the most efficient form
2 There are few horizontal links between the departments or the separate divisions, and this can lead to lack of coordination between them

Question 6

what is The matrix structure?

Answer 6

A matrix structure is an organisational structure that creates project teams that cut across traditional functional departments

Question 7

The matrix structure Advantages?

Answer 7

1 It allows total communication between all members of the team, cutting across traditional boundaries between departments in a hierarchy where only senior managers are designed to link with and talk to each other.
2 There is less chance of people focusing on juts what is good for their department. This is replaced with a feeling of what is good for the project and the business as a whole.
3 The crossover of ideas between people with specialist knowledge in different areas tends to create more successful solutions

Question 8

The matrix structure Disadvantages

Answer 8

1 There is less direct control from the ‘top’ as the team may be empowered to undertake and complete a project
2 This passing down of authority to more junior staff could be difficult for some managers to come to terms with
3 The benefit of faster reaction to new situations is, therefore, at the expense of reduced bureaucratic control, and this trend may be resisted by some senior managers
4 Team members may have, in effect, two leaders if the business retains levels of hierarchy for departments but allows cross-departmental teams to be created

Question 9

what is Levels of hierarchy?

Answer 9

A level of hierarchy is a stage of the organisational structure at which the personnel on it have equal status and authority

A tall (or narrow) organisational structure has a large number of levels of hierarchy and this creates three main problems,
1 Communication through the organisation can become slow with messages becoming distorted or ‘filtered’ in some way
2 Spans of control are likely to be narrow
There is likely to be a greater sense of remoteness, among those on lower levels, from the decision-making power at the top

In contrast a flat organisational structure will have few levels of hierarchy, but will tend to have wider spans of control

Question 10

what is Chain of command

Answer 10

The chain of command is the route through which authority is passed down an organisation – from the chief executive and the board of directors

The taller the organisational structure, the longer will be the chain of command – slowing down communications.

Question 11

what is Span of control

Answer 11

The span of control is the number of subordinates reporting directly to a manager

Span of control, can either be wide – with a manager directly responsible for many subordinates – or narrow – a manager has direct responsibility for a few subordinates

Question 12

what is Delegation

Answer 12

Delegation is passing authority down the organisational hierarchy

Question 13

Advantages of delegation

Answer 13

1 Gives senior managers more time to focus on important, strategic roles
2 Shows trust in subordinates and this can motivate and challenge them
3 Develops and trains staff for more senior positions
4 Helps staff to achieve fulfilment through their work (self-actualisation)

Question 14

Disadvantages of delegation

Answer 14

1 If the task is not well defined or if inadequate training is given, then delegation is unlikely to succeed
2 Delegation will be unsuccessful if insufficient authority (power) is given to the subordinate who is performing the tasks
3 Managers may only delegate the boring jobs that they do not want to do – this will not be motivating

Question 15

What is Centralization

Answer 15

Centralization means keeping all the important decision-making powers within head office or the center of the organisation

Question 16

What is Decentralization

Answer 16

Decentralization means decision-making powers are passed down the organisation to empower subordinates and regional/product managers

Question 17

What is Delayering

Answer 17

Delayering means removal of one or more of the levels of hierarchy from an organisational structure

Question 18

Advantages of delayering

Answer 18

1 Reduces business costs
Shortens the chain of command and should improve communication through the organisation
2 Increases spans of control and opportunities for delegation
3 May increase workforce motivation due to less remoteness from top management and greater chance of having more responsible work to perform

Question 19

Disadvantages of delayering

Answer 19

1 Could be ‘one-off’ costs of making managers redundant, for example redundancy payments
2 Increased workloads for managers who remain – this could lead to overwork and stress
3 Fear that redundancies might be used to cut costs could reduce the sense of security of the whole workforce – one of Maslow’s needs

Question 20

Advantages of centralisation

Answer 20

1 A fixed set of rules and procedures in all areas of the firm should lead to rapid decision making – there is little scope for discussion
2 The business has consistent policies throughout the organisation. This prevents any conflicts between the divisions and avoids confusion in the minds of consumers.
3 Senior managers take decisions in the interest of the whole business – not just one division of it
4 Senior managers at central office will be experienced decision makers

Question 21

Advantages of decentralisation

Answer 21

1 More local decisions can be made that reflect different conditions – the managers who take the decisions will have local knowledge and are likely to have closer contact with consumers
2 More junior managers can develop and this prepares them for more challenging roles
3 Delegation and empowerment are made easier and these will have positive effects on motivation
4 Decision making in response to changes, for example in local market conditions, should be quicker and more flexible as head office will not have to be involved every time

Question 22

what is a Line manager

Answer 22

Line managers are managers who have direct authority over people, decisions and resources within the hierarchy of an organisation

Question 23

what is a Staff managers

Answer 23

Staff managers are managers who, as specialists, provide support, information and assistance to line managers