Chapter 1 - Organisation Types And Structures Flashcards
1
Q
What is an organisation (Richard Daft)?
A
- A Social Entity
- Has Clear Goals
- Deliberately Structured
- Linked to External Environment (demand & competitors)
2
Q
What are the types of organisations (5)?
A
- Commercial (profit generating)
- Not-for-profit (service provision)(charity)
- Public Sector (owned by government)
- NGO (indenpendant voluntary assoc.)
- Co-operative (owned by it’s workers & all share profits)
3
Q
What is a Mission Statement?
A
A published statement of the companies core objectives.
4
Q
What should be in a Mission Statement according to Campbell?
A
- Purpose (why we exist)
- Strategy (how & where we compete)
- Policies & Behaviour Std (to help staff)
- Values (what we stand for)
5
Q
What should Core Objectives be (3)?
A
- Consistent
- SMART
- SAF
6
Q
How can Core Objectives be consistent (3)?
A
- Vertically (at all levels of staff)
- Horizontally (across all divisions of business)
- Overtime (updated & withstand changes)
7
Q
What are SMART objectives?
A
- Specific
- Measurable
- Agreed/Attainable
- Realistic/Relevant
- Time Bound
8
Q
What are SAF objectives?
A
- Suitable (for the companies mission)
- Acceptable to stakeholders
- Feasible, given the resources available
9
Q
How many directors must a Ltd and Plc have?
A
- Ltd. - 1+
- Plc. - 2+
10
Q
What are the directors responsibilities?
A
- Health and Safety
- Tax and Employment Law
- Equitable Fiduciary Duty (good faith) (look after interests of company)
11
Q
What are the two types of company structure?
A
- Formal - Clear segregation of duties, set out on paper.
Everyone knows their duties. - Informal - Ran day-to-day, may be different to what is set out on paper, people find work arounds.
12
Q
What are the 7 types of organisational structures?
A
- Entrepreneurial (spider web)
- Functional
- Matrix
- Divisional
- Geographical
- Product
- Virtual
No single ‘correct’ structure.
13
Q
What is an Entrepreneurial structure?
A
- New/small business
- One person controls everything
- Informal
- Founder has the power
- Reacts quickly to changes
- Not an expert at everything
- If founder is unavailable, no decisions are made
14
Q
What is a Functional structure?
A
- Organised around different functions
- Functions are catergorised into depts. or divisions
- Emphasis on roles rather than individuals
- Slow flow of information
Directors
Dept Heads
Low Lvl Managers
15
Q
What is a Matrix structure?
A
- A Net
- Communication increased (horizontal between individuals)
- Dual authority
- Individual Manager for Sales and Prod 1, reporting to a Sales Manager and a Production Manager.
- Increase in specific knwledge
- Conflicting goals
- Too many managers
16
Q
What is a Divisional structure?
A
- Similar to Functional, but instead of dept. heads it uses Divisions
- Each division doesnt interact with each other
- Central HQ for finance, HR, Legals, but may have other offices for each division
- Mars: Divisions for Chocolate, Pet food, Cleaning goods.
17
Q
What is a Geographical structure?
A
- Similar to Functional structure, but instead of dept. heads it uses locations.
18
Q
What is a Product structure?
A
- Similar to Divisional structure, but instead of a broad separation it is done by specific products.
19
Q
What is a Virtual structure?
A
- For internet based businesses
- Collection of small business online to look like a larger one (Etsy/Notonthehighstreet)
- Or online business where almost everything is outsourced
- Makes you seem like a larger business than you are
20
Q
What is Mintzberg’s Organisational Form?
A
- Similar to Pyramid
- Has 5 Components:
- Strategic Apex - Director (+Entrepreneurial)
- Middle Line - Middle Managers (+Divisional)
- Operating Core - Those doing (+Professional Bureaucracy)
- Technostructure - Advice Operating Core (+Machine & Audit)
- Support Staff - Support Operating Core (+Adhocracy)
21
Q
What is this theory called?
A
Mintsberg’s Organisational From
22
Q
Who or What is a Stakeholder?
A
A Stakeholder is anyone who can influence or be influence by an organisation.
(Anyone with a vested interest in the business)
23
Q
What are the different types of Stakeholders?
A
- Primary
- Internal - All Employees
- Connected - Those with a financial relationship (shareholder/debtor/creditor/customer)
- Secondary
- External - Government, Pressure group, Local community
24
Q
What is a Key Stakeholder?
A
A Key Stakeholder is one of the more important stakeholder.
One that has a larger impact on the business, both now and in the future.
25
What is Mendelow's Matrix?
It is a mapping to help ascertain key stakeholders.
26
What is this diagram called?
Porter's Value Chain
It shows the importance of a 'Value Chain'. This describes that no activity works in isolation and should all be aligned to the same goal (ie. being a budget product) to reach the targeted margin.
27
What influences structure?
* Size
* Type (partnership, multiational)
* Culture (formality, heirachy)
* Technology (amount of employees/Work from home)
* Environment (does it limit the business)
28
What is Centralisation?
Head office making all decisions:
+ Experienced people make decisions
+ Ensures consistency
+ Ensures fairly quick decision making
+ Procedures can be standardised
- Reduces day-to-day staff input into decisions
- Risk's demoralising staff, feel they have no power
29
What is Decentralisation?
Decisions are made by junior managers as authority is passed down:
+ Reduces burdens on senior management
+ Allows low level managers to be innovative and motivated
+ Low level managers may know local conditions better
- Less consistent throughout business
- Head Office may not be involved, meaning may miss oppertunities
30
What is the Scalar Chain?
It refers to the number of direct reports a manager has. Tall business have more managers, less reports and vice versa for short businesses.
31
Organisations may be viewed as a system, Open or Closed.
**_Open Systems_**
* Connected to and interacts with its environment
* Can be the whole organisation or depts.
* Almost all organisations are open, and some depts. are open or closed.
**_Closed Systems_**
* Isolated and independant of its environment
* Boundary separates organisation from environment
* Depts. may be closed , ie. R and D - so noone knows much about new products/ideas
32
What is the Boundary of Control?
* Is the limit of the businesses jurisdiction
* Can control those within boundary
* Insde out view
33
What is the Boundary of Identity?
* Those that affect the businesses identity
* But are not in the control of the business
* Seen as the business from those looking in
34
What is Exernalisation?
Replacing permanent employment with temporary, contract or casual workers.
35
What is Outsourcing?
It is the contracting of a task or function to an external providor.
**Business Process Outsourcing** is the outsourcing of a support function.
36
What does Cox say should be outsourced?
* Risidual competences can be outsourced easily (basic support (cleaning, recruitment)
* Complementary competences can be outsourced, but should be done with a trusted partner. (more important support finctions (IT/HR/Finance)
* Core competences should not be outsourced (the main business function)
37
What are the advantages and disadvantages of outsourcing?
+ less for management to organise
+ usually cheaper than doing it in house
+ greater cost certainty
+ access to expert knowledge
- Confidentiality/security concerns
- costs may rise
- loss of control
- difficult to reverse
38
What is Offshoring?
It is the transfer of an in house activity to a foreign country.
39
What is a Shared Service Centre?
It is a seperate business unit created within a company to deliver a service to the whole business (usually a large business with many subsiduries).
* Operate as independant business
* View departments as customers
* Aims to gain efficiencies through expertise and processes
* Held to agreed service levels
40
What is a Strategic Alliance?
It is 2 or more companies coming together for mutual gain.
Types include:
* Franchising: selling identity & system. Those selling retain control of brand.
* Licensing: selling a license allowing others to sell/produce your product or service
* Joint Venture: Entity created by 2 or more other businesses. Legal and formal.
* Consortia: Associated businesses helping each other to complete a project. Informal and contracted.
* Agents: A company may enter contract with an agent to sell or distribute their product for either fees or commission Usually for entering new markets.
41
What is Integration?
Businesses expand by either horizontal or vertical integration.
## Footnote
**_Horizontal_** - Acquisition of a competitor or company in the same industry.
**_Vertical_** - Acquisition of a supplier (backward) or customer (forward) business.
42
What are the benefits of Horizontal Integration?
* Economies of Scale
* Efficiencies
* Growth of market share
* Route to overseas market
* Synergies
43
What are the benefits of Vertical Integration?
* Control of prices of materials
* Improve distribution
* Take profits from suppliers/customers
* Create a barrier to entry
* Spreads risk
