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Business, Technology, and Finance > Operational and Business Structures > Flashcards

Operational and Business Structures Flashcards

1
Q

Define organisational structure

A

The grouping of people into departments or sections and the allocation of responsibility and authority

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2
Q

Which of Fayrol’s fourteen rules of managerial conduct are relevant to structure?

A

DUUCS

  1. Division of work
  2. Unity of command
  3. Unity of direction
  4. Centralisation
  5. Scalar chain
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3
Q

Define division of work

A

To improve practice and familiarity and become specialised

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4
Q

Define unity of command

A

Each subordinate answerable to only one superior

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5
Q

Define unity of direction

A

Only a single head and plan for a set of activities

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6
Q

Define scalar chain

A

Lines of authority should exist from the top to the bottom of the organisation

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7
Q

What are the two modern principles?

A
  1. Multi-skilling

2. Flexibility

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8
Q

What are the benefits of multi-skilling?

A

Enables labour and other resources to be used more efficiently

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9
Q

What are the benefits of flexibility?

A

Enables companies to respond quickly to changing market conditions

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10
Q

Define multi-skilling

A

Teams where individuals are trained to perform a variety of different tasks

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11
Q

Define flexibility

A

Flexible working hours, matrix structure and temporary project teams

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12
Q

How can organisational structure be communicated?

A
  1. Organisational charts
  2. Organisational manuals
  3. Job descriptions
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13
Q

What are Mintzberg’s building blocks and coordinating components?

A
  1. Operating core
  2. Strategic apex
  3. Middle line
  4. Technostructure
  5. Support structure
  6. Ideology
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14
Q

Define operating core

A

The basic work of the organisation

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15
Q

Define strategic apex

A

Higher management

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16
Q

Define middle line

A

Managers linking between the strategic apex and operating core

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17
Q

Define technostructure

A

Role is to design procedures and standards; e.g accountants, computer specialists, engineers

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18
Q

Define support structure

A

Provision of services to the organisation which support operations and production

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19
Q

Define ideology

A

Organisation’s values and beliefs

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20
Q

Define Mintzberg’s coordinating mechanisms

A

Considers how the building blocks are integrated into a cohesive unit

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21
Q

Define Mintzberg’s building blocks and coordinating components

A

Considers how any organisation can be analysed into six building blocks and how these are co-ordinated

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22
Q

What are Mintzberg’s coordinating mechanisms?

A
  1. Mutual adjustment
  2. Direct supervision
  3. Standardisation of work processes
  4. Standardisation of outputs
  5. Standardisation of skills and knowledge
  6. Standardisation of norms
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23
Q

Define mutual adjustment

A

Coordination through informal contact

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24
Q

Define direct supervision

A

Hierarchy

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25
Q

Define standardisation of work processes

A

Specified operating procedures

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26
Q

Define standardisation of outputs

A

Product and service specifications

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27
Q

Define standardisation of skills and knowledge

A

Identifies training needed and necessary skills base to do work

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28
Q

Define standardisation of norms

A

Culture

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29
Q

What is the environment of a simple structure configuration?

A
  1. Simple

2. Dynamic

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30
Q

What are the internal factors of a simple structure configuration?

A
  1. Small
  2. Young
  3. Simple tasks
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31
Q

What is the key building block of a simple structure configuration?

A

Strategic apex

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32
Q

What is the key coordinating mechanism of a simple structure configuration?

A

Direct supervision

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33
Q

What is the environment of a machine bureaucracy configuration?

A
  1. Complex

2. Static

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34
Q

What are the internal factors of a machine bureaucracy configuration?

A
  1. Large
  2. Old
  3. Regulated tasks
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35
Q

What is the key building block of a machine bureaucracy configuration?

A

Techno structure

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36
Q

What is the key coordinating mechanism of a machine bureaucracy configuration?

A

Standardisation of work

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37
Q

What is the environment of a professional bureaucracy configuration?

A
  1. Complex

2. Static

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38
Q

What are the internal factors of a professional bureaucracy configuration?

A
  1. Professional

2. Simple systems

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39
Q

What is the key building block of a professional bureaucracy configuration?

A

Operating core

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40
Q

What is the key coordinating mechanism of a professional bureaucracy configuration?

A

Standardisation of skills

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41
Q

What is the environment of a divisionalised configuration?

A
  1. Simple
  2. Static
  3. Diverse
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42
Q

What are the internal factors of a divisionalised configuration?

A
  1. Very large
  2. Old
  3. Divisible tasks
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43
Q

What is the key building block of a divisionalised configuration?

A

Middle line

44
Q

What is the key coordinating mechanism of a divisionalised configuration?

A

Standardisation of outputs

45
Q

What is the environment of an adhocracy/innovative configuration?

A
  1. Complex

2. Dynamic

46
Q

What are the internal factors of an adhocracy/innovative configuration?

A
  1. Young

2. Complex tasks

47
Q

What are the key building blocks of an adhocracy/innovative configuration?

A
  1. Operating core

2. Support staff

48
Q

What is the key coordinating mechanism of an adhocracy/innovative configuration

A

Mutual adjustment

49
Q

Define Mintzberg’s main configurations

A

Combination of building blocks and coordinating mechanisms

50
Q

What are Mintzberg’s main configurations?

A
  1. Simple structure
  2. Machine bureaucracy
  3. Professional bureaucracy
  4. Divisionalised
  5. Adhocracy/innovative
51
Q

What are the features of the entrepreneurial structure?

A
  1. The structure is built around the owner-manager

2. The structure is totally centralised with all key decisions being made by the strategic leader

52
Q

What are the advantages of an entrepreneurial structure?

A
  1. Fast decision making
  2. More responsive to the market
  3. Good control
  4. Close bond to the workforce
53
Q

What are the disadvantages of an entrepreneurial structure?

A
  1. Lack of career structure
  2. Maybe too centralised
  3. Cannot cope with diversification
  4. Cannot cope with growth
54
Q

What are the features of the functional structure?

A
  1. Common in organisations that have outgrown the entrepreneurial structure and need to organise the business on a functional basis
  2. Most appropriate to smaller companies with few products and locations and which exist in a relatively stable environment
55
Q

What is the hierarchy in a functional structure?

A

Board of directors above the marketing department, production department, finance department, and HR department

56
Q

What is the hierarchy of an entrepreneurial structure?

A

Manager above subordinates

57
Q

What are the advantages of a functional structure?

A
  1. Economies of scale
  2. Standardisation
  3. Efficiency
  4. Specialists more comfortable
58
Q

What are the disadvantages of a functional structure?

A
  1. Empire building
  2. Slow to adapt to market changes
  3. Conflicts between functions
  4. Cannot cope with diversification
59
Q

What are the features of a divisionalised structure?

A
  1. The organisation is structured in accordance with product lines/brands or geographical locations
  2. Headed by general managers who enjoy responsibility for their own resources
60
Q

What is the hierarchy in a divisionalised structure?

A

Board of directors above divisions

61
Q

What are the advantages of a divisionalised structure?

A
  1. Enables product or geographical growth
  2. Clear responsibility and accounting for products
  3. Training of general managers
62
Q

What are the disadvantages of a divisionalised structure?

A
  1. The potential loss of control
  2. Lack of goal congruence
  3. Duplication
  4. Specialists may feel isolated
63
Q

What are the features of a matrix structure?

A
  1. Aims to combine the benefits of the divisional structure and the functional structure
  2. Usually found in multi-product and multi-functional organisations
  3. Significant interrelationships and interdependencies
64
Q

What is the advantage of a matrix structure?

A

Flexibility

65
Q

What are the disadvantages of a matrix structure?

A
  1. Dual command
  2. Dilution of functional authority
  3. Time-consuming meetings
66
Q

Define decentralisation

A

Refers to the degree of autonomy/decision-making ability diffused through the organisation

67
Q

What are the advantages of decentralisation?

A
  1. Senior management free to concentrate on strategy
  2. Better local decisions due to local expertise
  3. Better motivation
  4. Quicker responses/flexibility
  5. Training
  6. Career path
68
Q

What are the disadvantages of decentralisation?

A
  1. Loss of control by senior management
  2. Dysfunctional decisions due to a lack of goal congruence
  3. Poor decisions made by inexperienced managers
  4. Extra costs regarding information
69
Q

Which factors affect the degree of decentralisation?

A
  1. Management style and ability
  2. Size of the organisation
  3. Range of products
  4. Geographic location
70
Q

Define the span of control

A

Considers how many people report to one superior

71
Q

What are the features of tall organisations?

A
  1. Many managerial levels

2. Narrow span of control

72
Q

What are the features of flat organisations?

A
  1. Fewer managerial levels

2. Wide-span of control

73
Q

What are the advantages of tall organisations?

A
  1. More promotional opportunities
  2. Narrow spans of control mean more supervision
  3. Smoother progression from one level to another
  4. Small spans of control lead to more personal contact with the line manager
74
Q

What are the disadvantages of tall organisations?

A
  1. Inhibits delegation
  2. More expensive in terms of management overheads
  3. Extra levels of management slow down decision-making and communication
75
Q

What are the advantages of flat organisations?

A
  1. Wide span of control encourages more delegation
  2. Lower management costs
  3. Better communication between top management and the workers
76
Q

What are the disadvantages of flat organisations?

A
  1. Managers may be overworked as they have more people to supervise
  2. Greater delegation means less central control
77
Q

Which factors influence the span of control?

A
  1. Complexity of work
  2. Degree of change
  3. Management’s ability
  4. Assistance received
  5. Amount of non-supervisory work undertaken by the supervisor
  6. Level of knowledge and experience of staff
  7. Level of the cost associated with mistakes
  8. Level of danger
  9. The physical proximity of subordinates
78
Q

What are the two extremes of structure summarised by Burns and Stalker?

A
  1. Mechanistic

2. Organic

79
Q

Define a mechanistic structure

A
  1. Rigid

2. Formalised

80
Q

Define an organic structure

A
  1. Fluid

2. Flexible

81
Q

What are the features of a mechanistic structure?

A
  1. Formal
  2. Hierarchical
  3. Authority and control based
  4. Focuses on efficiency
82
Q

What are the features of an organic structure?

A
  1. Informal
  2. Flat
  3. Project teams
  4. Power is based on expertise
83
Q

Define a sole trader

A

A single proprietor owns the business, taking all the risks and enjoying all the rewards

84
Q

What are the advantages of a sole trader?

A
  1. No need to share profits
  2. Usually low cost
  3. Often work from home
  4. Self-sufficiency
  5. Independence
  6. Little or no regulation
  7. Own boss
85
Q

What are the disadvantages of a sole trader?

A
  1. The sole trader carries unlimited liability
  2. Personally responsible for business obligations incurred
  3. High risk
  4. Problems raising finance
  5. Small
  6. Totally dependent on health and presence of the proprietor
  7. Can’t use floating charges
86
Q

Define partnership

A

Two or more people who own a business, taking all the risks and enjoying all of the rewards

87
Q

What are the two different forms of partnerships?

A
  1. General partnerships

2. Limited liability partnerships

88
Q

Define general partnerships

A

No separate legal entity

89
Q

Define limited liability partnerships

A

A separate legal identity exists, which means the partners’ liability is limited to their investment in the partnership

90
Q

What are the advantages of general partnerships?

A
  1. Few regulatory obligations
  2. Bring together a range of skills and experience
  3. More owners to put finances into the business
  4. Business not dependent on the health or presence of only one individual
91
Q

What are the disadvantages of general partnerships?

A
  1. Each partner has unlimited liability for the business debts
  2. Potential disagreements between partners
92
Q

Define a limited company

A

A company is a separate legal entity from its owners

93
Q

What are the two forms of limited companies?

A
  1. Private limited company

2. Public limited company

94
Q

What is the shorthand for a private limited company?

A

Ltd

95
Q

What is the shorthand for a public limited company?

A

Plc

96
Q

What are the advantages of a limited company?

A
  1. The liability of shareholders to business debts is limited to the initial investment in company shares
  2. Ownership transferred easily by selling shares
  3. Companies can find it easier to raise new capital
  4. Can use both floating and fixed charges
97
Q

What are the disadvantages of a limited company?

A
  1. Legal burdens
  2. Quoted companies can suffer from short-term pressure from city investors
  3. Financial statements open to public scrutiny
98
Q

Define groups

A
  1. A number of companies under common control
  2. The parent company will own shares in subsidiary companies to an extent that the owners of the parent company will also have control over the subsidiary
99
Q

What are the advantages of operating as a group?

A
  1. Different companies can be responsible for different products
  2. Easy to sell off part of the business
  3. Economies of scale through vertical integration
100
Q

What are the disadvantages of operating as a group?

A
  1. Consolidated accounts must be prepared

2. Many acquisitions add negative shareholder value

101
Q

What are the types of alliances?

A
  1. Joint venture
  2. Strategic alliances
  3. Licensing/franchising
  4. Agency agreements
102
Q

Define joint venture

A

A separate joint-owned company

103
Q

Define strategic alliances

A

Loose collaboration

104
Q

Define licensing/franchising

A

One company allows another to manufacture and market its product or service

105
Q

Define agency agreements

A

One party distributes another’s products

106
Q

What issues need to be considered when forming alliances?

A
  1. Sharing risks and returns
  2. Splitting out costs
  3. Potential conflicts over decisions
  4. Potential to gain expertise from the other party
  5. Allowing the third party access to your information and skills

Business, Technology, and Finance (8 decks)

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