Organisation Structures + Grouping - UB

Question 1

What is an internal structure?

Answer 1

• An organisation consists of a group of people who come together for a common goal or aim.
• The organise themselves internally to suit the type of activities that the organisation is carrying out.

Question 2

How do organisations group themselves using internal structure? (5)

Answer 2

• The size of the organisation
• The technology being used
• Who the target market is
• The good or service being provided
• The amount of finance available

Question 3

What is a tall structure?

Answer 3

• A tall, or hierarchical, structure has many layers of management. This means that is has a long chain of command; it will take time for instructions and information to pass through the structure.
• These structures are often found in public sector organisations but, as a consequence of the global economic downturn in the early 2000s, many public sector organisations have restructured to save staffing costs.

Question 4

What is a flat structure?

Answer 4

• Flat structures contain fewer levels of management companies to tall ones. This means that flat structures have a shorter chain of command; it will take less time for instruction and information to pass through the structure.
• This time of structure is often found in smaller organisations. Because there are fewer layers of management compared to tall structures, the cost of management salaries will be less.

Question 5

What is an organisational chart? (7)

Answer 5

• Levels of authority and responsibility
• The lines of communication
• Chain of command
• Different relationships
• Work delegation
• Overall responsibility of the organisation
• Span of control

Question 6

What is functional grouping?

Answer 6

• Functional Grouping means grouping by department and people working in these departments have a similar area of interest.
• Functions might include Human Resources (HR), Operations, Marketing, Finance and Research and development.

Question 7

What is span of control?

Answer 7

• This is the number of subordinates who report to one person.
• Wide span of control will means that many people report to one person whereas a narrow span of control will mean that very few people report to one person.

Question 8

What is a line relationship?

Answer 8

This is a relationship between a subordinate and their line manager.

Question 9

What is a matrix structure?

Answer 9

• Also referred to as project-based structures. These tend to be formed when a specific task or project is to be carried out. People from across the organisation will come together from various departments to form the matrix structure.
• When the task or project has been completed, the matrix structure will become obsolete. A project or team leader will be appointed to provide leadership to the task or project being undertaken.

Question 10

What is Entrepreneurial structures?

Answer 10

• Often found in smaller organisations. This type of structure is seen when decisions are made by the owner with very little input from employees. Decisions can be made quickly but it can reduce employee’s motivation as they are not included in the process.
• Good ideas or creative solutions to problems are not considered because employees have not been consulted. This type of structure is not often found in larger organisations because it would place too much of a heavy workload on managers who have to make decisions.

Question 11

What is a centralised structure?

Answer 11

In centralised organisations the majority of decisions are taken by senior managers and then passed down the organisational hierarchy.

Question 12

What is a decentralised organisation?

Answer 12

Decentralised organisations delegate authority down the chain of command, thus reducing the speed of decision making.

Question 13

What is a Later relationship?

Answer 13

This is a relationship between 2 or more people on the same level of the organisation.

Question 14

What is a functional relationship?

Answer 14

This is a relationship between 2 functional areas in an organisation eg one providing support to another.

Question 15

What is a staff relationship?

Answer 15

This is a relationship between 2 or more people in an organisation who provide advice or support to others.

Question 16

What is an informal relationship?

Answer 16

An informal relationship exists when 2 or more people communicate on an informal basis, normally outwith the organisation

Question 17

Why would an organisation change its structure? (4)

Answer 17

• The size of the organisation has changed
• The availability of finance has changed
• Market conditions have changed
• New technology has become available

Question 18

How can an organisation change it structure? (2)

Answer 18

• By delayering

- By downsizing

Question 19

What is delayering?

Answer 19

This means removing layers of management from the structure. For example, moving from a tall structure to a flat structure. As well as saving money on management salarieis, it allows for quicker communication and decision-making because there are fewer layers.

Question 20

What is delayering?

Answer 20

• Market conditions may be responded to more quickly compared to in a taller structure. Employees may feel more empowered to make decisions and to use their own initiative; this can all increase motivation and productivity.
• This is because managers will have a wider span of control and ultimately might mean that the supervision and management of employees may be more difficult. Delayering also means that there will be fewer promotion opportunities for existing staff

Question 21

What is downsizing?

Answer 21

This involves removing some of the activities that the organisation carries out from its structure eg closing a branch or factory in response to external factors. Some activities might be outsourced to enable the organisation to concentrate on its core activities.