Internal Structures

Question 1

What do organisational charts show?

Answer 1

• who is responsible for the overall business
• different levels of authority and responsibility
• lines of communication and chain of command
• span of control
• relationships within the organisation
• where the work can be delegated

Question 2

Organisational charts key words:

Answer 2

• Responsibility
• Authority
• Chain of command
• delegation
• lines of communication

Question 3

What is Span of control?

Answer 3

The number of staff a manager has responsibility for

Question 4

What is WIDE span of control?

Answer 4

• more empowerment is possible
• tasks can be delegated more easily
• can cause lots of stress for managers
• may be motivating to managers
• fewer managers saves money
• more effective and quicker decision making

Question 5

What is NARROW Span of Control?

Answer 5

• less empowerment
• delegation more difficult
• more opportunities for subordinates to communicate with their managers
• slower decision making due to long chain of command

Question 6

What are the types of relationships within an organisation?

Answer 6

• line
• lateral
• staff
• functional
• informal

Question 7

What is a line relationship?

Answer 7

This describes the relationship between a superior and a subordinate and can be identified as a vertical line between individuals on an organisation chart

Question 8

What is a lateral relationship?

Answer 8

Exist between individuals at the same level in the organisations hierarchy. These individuals have the same levels of authority and responsibility. Usually illustrated by a horizontal line on an organisation chart.

Question 9

What is a staff relationship?

Answer 9

This is a relationship between the organisation and someone in it who acts in an advisory capacity for the benefit if the organisation as a whole.

Question 10

What is a functional relationship?

Answer 10

Exist when departments are given responsibility for a specific function throughout the organisation.

Question 11

What is an informal relationship?

Answer 11

These are relationships that develop between staff when they interact informally with each other. Eg. During lunch breaks.
This creates an opportunity for employees to share info and support.

Question 12

What are the types of structures?

Answer 12

Tall (hierarchical)
Flat (hierarchical)
Matrix
Entrepreneurial

Question 13

Factors that affect choice of structure?

Answer 13

• size of organisation
• technology being used
• who the customer is
• the good or service being provided
• finance available

Question 14

What is the tall hierarchical structure?

Answer 14

This has many layers of management and therefor is more managers than a flat structure

Question 15

Adv of tall structure?

Answer 15

• clear lines of communication
• lots of promotion opportunities
• opportunities for specialisation

Question 16

Disadv of tall structure?

Answer 16

• slower to communicate and make decisions
• more expensive for managerial salaries
• senior and junior staff disconnected

Question 17

What is a flat hierarchical structure?

Answer 17

This has fewer layers of management meaning each manager is in charge if more staff.

Question 18

Adv of flat structure?

Answer 18

• staff are empowered
• quicker decision making
• less managerial wages

Question 19

Disadv of flat structure?

Answer 19

• less chance of promotion
• managers have more staff to control
• less clear communication lines

Question 20

What is a matrix structure?

Answer 20

Usually used for products and consists of staff from various functional departments working together. Group is dissolved when task is completed

Question 21

Adv of a matrix structure?

Answer 21

• staff with different skills and viewpoints work together

- motivates staff as they get leadership opportunities

Question 22

Disadv of a matrix structure?

Answer 22

• may be unclear who to report to

- can be expensive as managerial roles are duplicated

Question 23

What is an entrepreneurial structure?

Answer 23

Used in smaller organisations where major decisions are made by one or two people

Question 24

Adv of entrepreneurial structure?

Answer 24

• quick decision making

Question 25

Disadv of entrepreneurial structure?

Answer 25

- lack of staff involvement with decisions- motivation | - lots of responsibility for few decision makers

Question 26

What is delayering?

Answer 26

Involves cutting out levels of management within the organisation to “flatten out” the structure. Used by companies to cut costs, increase efficiency and overcome its competition.

Question 27

What is downsizing?

Answer 27

When a company reduces its workforce, usually a result of poor economic conditions. (the company has to cut jobs in order to lower costs and maintain profitability.)

Question 28

What is centralisation?

Answer 28

Where decisions are made by senior management for the whole organisation

Question 29

Adv if centralisation?

Answer 29

- uniform approach for whole organisation | - most senior people have responsibility

Question 30

Disadv of centralisation?

Answer 30

- staff have no involvement in decision making (motivation) | - lack of local knowledge

Question 31

What is de-centralisation?

Answer 31

Where decision making is delegated to staff throughout the organisation, staff make decisions in branches or departments

Question 32

Adv of de-centralisation?

Answer 32

- staff are empowered and motivated | - local/departmental needs can be taken into account

Question 33

Disadv of de-centralisation?

Answer 33

- lack of consistency of approach | - staff may make decisions Inconsistent with company wide approach

Question 34

What are the types of grouping?

Answer 34

- Functional - Product/service - Customer - Place/territory (geographical) - Technological

Question 35

What is functional grouping?

Answer 35

Grouped by department, eg marketing, finance, human resources etc

Question 36

Adv of functional grouping?

Answer 36

- clear structure/lines of authority - clearly defined tasks and jobs - specialism in each function - staff can seek assistance and support from colleagues easily - less duplication of resources

Question 37

Disadv of functional grouping?

Answer 37

- departmental aims may overtake those of the organisation - can be slow to respond to market changes - may compete, resulting in poor relationships

Question 38

What is product/ service grouping?

Answer 38

An organisation is structured around the products its produces. Each department focuses on one particular product

Question 39

Adv of product/service grouping?

Answer 39

- product expertise is built up | - quick responses to market changes

Question 40

Disadv of product/service grouping?

Answer 40

- rivalry between departments | - lines of authority may not be as clear

Question 41

What is technological grouping?

Answer 41

When organisations group their activities along technological lines such as building a car

Question 42

Adv of technological grouping?

Answer 42

- staff become highly specialised - it can be cheaper to train staff as they only have to learn to operate one piece of tech - problems with machinery can be more easily identified

Question 43

Disadv of technological grouping?

Answer 43

- work can become low skilled and repetitive and so staff lose motivation

Question 44

What is customer grouping?

Answer 44

Organisations are structured around particular customer groups

Question 45

Adv of customer grouping?

Answer 45

- positive customer relationships can be built | - staff knowledge of customers

Question 46

Disadv of customer grouping?

Answer 46

- high staffing costs

Question 47

What is place/territory (geographical) grouping?

Answer 47

Organisations structured around geographical area in which it operates

Question 48

Adv of place/territory grouping?

Answer 48

- can become familiar with different cultures in which they work - can use tech to good effect

Question 49

Disadv of place/territory grouping?

Answer 49

- can be expensive | - duplication of effort can occur