Divisions (Hardy's Shamrock & Contingency Theory)

Question 1

What are the components of Hardy’s Shamrock?

Answer 1

• Professional core (permanently employed staff)
• Contractual fringe (outsourced staff)
• Flexible labour force (part-time & temporary staff to cover peak demand)
• Customers (can perform tasks themselves e.g. booking online)

Question 2

What is Hardy’s Shamrock used to analyse?

Answer 2

Analyses how companies can improve efficiency and cut costs by considering staffing issues more flexibly.

Question 3

What is the Contingency theory?

Answer 3

There are two structures that can be adopted depending on the type of environment a business operates in:
- Mechanistic is suitable for stable environments (a mechanistic structure is more hierarchal and formal)
- Organic is suitable for dynamic environments (an organic structure is more informal and flat)

Question 4

What are the 3 rules for effective divisionalisation?

Answer 4

• Autonomy
• Control
• Goal congruence

Question 5

What 2 measurements can be used to analyse a division’s performance?

Answer 5

• Return on Investment (ROI)
• Residual income (RI)