6 - Organisational Design

Question 1

What Are All The Models Of Organisational Structure?
(4 Points)

Answer 1

~ Functional.

~ Product-based.

~ Regional.

~ Matrix.

Question 2

What Are The 4 Functional Areas Of A Business?

Answer 2

~ Marketing.

~ Operations.

~ Human Resources.

~ Finance.

Question 3

Describe The ‘Functional’ Organisational Structure
(2 Points)

Answer 3

~ When employees are organised based on their roles and functions.

~ Each functional area, works in its own area of expertise.

Question 4

What Are The Advantages Of A ‘Functional’ Organisational Structure?
(2 Points)

Answer 4

~ Specialisation, within the functional area.

~ Skills can be developed over time.

Question 5

What Are The Disadvantages Of A ‘Functional’ Organisational Structure?
(2 Points)

Answer 5

~ Conflict may be caused, due to a lack of communication between the functional areas.

~ Meaning the business cannot be very flexible, causing them to be slower to react to change.

Question 6

Describe The ‘Product-Based’ Organisational Structure
(2 Points)

Answer 6

~ Business organises teams, around different products or product ranges.

~ Each team has its functional department, but HR is centralised.

Question 7

What Are The Advantages Of A ‘Product-Based’ Organisational Structure?
(2 Points)

Answer 7

~ Focused expertise in each of the functional areas.

~ Faster more streamlined in all areas, leading to increased efficiency.

Question 8

What Are The Disadvantages Of A ‘Product-Based’ Organisational Structure?
(3 Points)

Answer 8

~ Can cause a duplication of roles and resources.

~ Lack of collaborating, due to poor coordination.

~ Slow to react to external change.

Question 9

Describe The ‘Regional’ Organisational Structure
(2 Points)

Answer 9

~ When the organisation, is divided into different geographical regions

~ Each region, has its own set of managers.

Question 10

What Are The Advantages Of A ‘Regional’ Organisational Structure?

Answer 10

Can tailor strategies, to the local area.

Question 11

What Are The Disadvantages Of A ‘Regional’ Organisational Structure?
(2 Points)

Answer 11

~ Risk of regional inefficiencies and conflicts.

~ Cost duplications.

Question 12

Describe The ‘Matrix’ Organisational Structure

Answer 12

Where the employees report to both, the functional manager and the project manager.

Question 13

What Are The Advantages Of A ‘Matrix’ Organisational Structure?
(3 Points)

Answer 13

~ Increases the flexibility of the organisation, adapt quickly to changes.

~ Increases efficiency, expertise and skills can be shared across projects.

~ Increased collaboration.

Question 14

What Are The Disadvantages Of A ‘Matrix’ Organisational Structure?
(3 Points)

Answer 14

~ Employees may be unclear on who and what the priority is.

~ Power struggles and conflict between functional area and project.

~ Slow down communication, as there are too many stakeholders.

Question 15

What Are The Influences On Organisational Design?
(5 Points)

Answer 15

~ Delegation.

~ Span.

~ Hierarchy.

~ Authority.

~ Centralisation and decentralisation.

Question 16

Describe Delegation

Answer 16

When managers give authority to subordinate employees to perform tasks or make specific decisions.

Question 17

What Are The Advantages Of
Delegation?
(3 Points)

Answer 17

~ Subordinates may be empowered by the authority and responsibility. This would lead to higher motivation, more productive and more efficient.

~ Fosters culture of internal recruitment, as managers are giving authority to subordinates, being effectively trained. E.g. New manager can be hired internally.

~ Managers are able to fully focus on their complex tasks, simpler tasks are given to subordinates.

Question 18

What Are The Disadvantages Of Delegation?
(2 Points)

Answer 18

~ Subordinates may be demotivated by increased workload, decreasing productivity.

~ Motivation can fall as a result, there is an increased risk of employees leaving the business, all the gains from internal recruitment may be lost.

Question 19

Describe Span Of Control
(3 Points)

Answer 19

~ Shows the number of subordinates that a manager or supervisor is directly responsible for.

~ Wide span of control -> manager has many subordinates.

~ Narrow span of control -> manager has very subordinates.

Question 20

Describe Levels Of Hierarchy
(2 Points)

Answer 20

~ Tall and thin -> where each superior is responsible for a few subordinates.

~ Wide and flat -> Each superior is responsible for a large number of subordinates.

Question 21

Describe Centralised Structures
(4 Points)

Answer 21

~ Where control and therefore decision making is made by the highest layers of management.

~ E.g. CEO, board of directors and senior management.

~ Tall structures, suits authoritarian management, where employees are less skilled.

~ E.g. Fast food franchises.

Question 22

What Are Advantages Of Centralised Structures?
(4 Points)

Answer 22

~ Quicker decision making as fewer staff involved, experienced.

~ Consistency in the aims, visions and culture of the business.

~ Motivation as there is a clear job to do, this can increase confidence making them more productive.

~ Maintains a tight control.

Question 23

What Are Disadvantages Of Centralised Structures?
(2 Points)

Answer 23

~ Employees have less flexibility in decision making, leading to missed opportunities.

~ Affects motivation as employees may feel less empowered, motivated, which would decrease productivity and innovation.

Question 24

Describe Decentralised Structures
(4 Points)

Answer 24

~ When control and decision making is delegated by the highest layers of management.

~ E.g. To middle / lower layers of management, departments and locations.

~ Flat structures, suits a democratic management, where employees are more skilled.

~ E.g. Tech start-ups.

Question 25

What Are Advantages Of Decentralised Structures? (3 Points)

Answer 25

~ Increases motivation as they are empowered, increasing motivation, productivity and innovation. ~ Flexible decisions making, seizing opportunities and no need to check with the top layer of management. ~ Internal recruitment, decreasing recruitment costs.

Question 26

What Are Disadvantages Of Decentralised Structures? (2 Points)

Answer 26

~ Less consistency, as the person it has been delegated to might have different plans which don't align with culture and aims, causing differing customer experiences. ~ Depends on the skills and experience of the person being delegated.