chapter 9

Question 1

what is an organisation?

Answer 1

it is the different ways in which companies may organise some of its functions

Question 2

what are the two types of organisations?

Answer 2

-organisation of people
-organisation of decision making

Question 3

organisaiton of people?

Answer 3

this includes the different types of structure and it is also explained in the mintzberg model

Question 4

The different types of structures?

Answer 4

-entrepreneurial structure
-functional structure
-divisional structure
-matrix structure
-network structure

Question 5

what is entrepreneurial structure?

Answer 5

this is when decision making is centralised between managers an downers, some of the advantages would be that it is quicker to respond to changing needs to of the market

Question 6

what is functional structure?

Answer 6

this is the next step after entrepreneurial structure where a product offering one services would have different departments to maximise efficiency

Question 7

what is divisional structure?

Answer 7

this is for MNC that have a large portfolio of products or services in which each department has a dedicated manager, it is great as it exploits the economies of scale but could be bad because situations it would be inconvenient for those firm that require quick thinking especially those firms taking more of an emergent approach.

Question 8

what is matrix structure?

Answer 8

it is the mix of both divisional and functional structure

Question 9

what is a flexible structure?

Answer 9

it is one that adapts to the changing environment, it can be explained through handy shamrocks model.

Question 10

shamrocks model?

Answer 10

used to describe a. flexible firm, components include:

-professional core
-contractual fringe
-flexible labour
-customers

Question 11

contractual fringe?

Answer 11

this is when non-core tasks are completed by part time employees

Question 12

professional core?

Answer 12

this is when core activities are completed by full time employees

Question 13

labour flexibility?

Answer 13

this is when it is easier to employ labour especially during times of peak demand.

Question 14

networks sturcute?

Answer 14

a structure that can be applies both with and within an industry

Question 15

components of a network structure?

Answer 15

-Virtual organisations
-hollow organisations
-modular organisations

Question 16

virtual organisation?

Answer 16

this is when employees can communicate virtually and still be able to maximise efficiency

Question 17

hollow organisaiton?

Answer 17

non-essential work is outsourced

Question 18

modular organisation?

Answer 18

this is when production processes are organised in separate modules and are outsourced.

Question 19

what is the minztberg model?

Answer 19

explains an organisation structure by:
-operation core
-apex core
-inside line
-techno structure
-support structure
-ideology

Question 20

operation core?

Answer 20

this is the core activities of a business

Question 21

apex core?

Answer 21

this is the part where senior officials/managers get involved with the long term strategic planning

Question 22

middle line

Answer 22

this is when managers are in between the operation core and apex core

Question 23

techno structure

Answer 23

this is where accountants come in and set the standards and policies

Question 24

support structure

Answer 24

provisions of services such as the internal firm service

Question 25

ideology

Answer 25

this is the culture and make up of the firm

Question 26

what is the organisaiton of decision making?

Answer 26

-centralised v decentralised -organic vs mechanistic -span of control

Question 27

span of control

Answer 27

-tall : when firms have many lines of authority -flat: when firms have one individual who is authoritative over others.

Question 28

decentralisation?

Answer 28

when power diverts form the centre

Question 29

organic structure

Answer 29

this is more of a flexible structure

Question 30

mechanistic structure?

Answer 30

more rigid structure.

Question 31

transfer pricing?

Answer 31

this is when a two connected firms trade goods or services, it is done in order for the group to save profits from being taxed at a higher rate.

Question 32

residual income?

Answer 32

controllable income - (capital employed x target % returns)

Question 33

ROI?

Answer 33

profit controllable by managers / capital employed in that division

Question 34

methods of transfer pricing?

Answer 34

-cost plus pricing -opportunity cost -negotiated pricing -two part tariff -dual pricing -market prices

Question 35

corporate governance?

Answer 35

system of rules, practices and processes on how a company should be ran.