Organisational And Business Structure

Question 1

How is organisational structure formed?

Answer 1

Sp.litting people into departments or teams and allocation of responsibility and authority

Question 2

What are the four levels of management?

Answer 2

Top management
Middle management
First line management.
Direct operational staff 

Question 3

Mintzberg divides organisations into six building blocks what are they?

Answer 3

Strategic apex – high management – overall strategic long-term planning.
Middle line – managers linu apex and operating core
Operating core – the basic work of the organisation – the shopfloor
Te structure – accountants, computer, specialist engineers – role to design procedures and standards.
Support structure – provision of services to the organisation which support operation and production, e.g. catering
Ideology – organisations, values and beliefs 

Question 4

What are Mintzberg’s coordinating mechanisms?

Answer 4

Direct supervision - hierarchy
Standardisation of work – specified operating procedures 
Standardisation skills – identifies training needs.
Standardisation of outputs – product service specifications.
Mutual adjustments – coordination through informal contact

Question 5

What are the basic principles of organisational structure?

Answer 5

Division of work?
Scalar chain.
Correspondence of authority and responsibility.
Centralisation
Unity of command
Unity of direction.
Equity

Question 6

What is multi skilling?

Answer 6

Teams where individuals are trained to perform a variety of different tasks.
Enables labour and other resources to be used efficiently

Question 7

What is flexibility?

Answer 7

Flexible working hours matrix structure, contemporary project teams.
Enables companies to respond quickly to changing market conditions

Question 8

What are the three main ways of the communicating structure?

Answer 8

Organisational charts
Organisational manuals.
Job descriptions

Question 9

Inspect building blocks and coordinating mechanisms can be combined into five types of organisational structure. What are they? 

Answer 9

Simple structure
Machine bureaucracy.
Professional bureaucracy.
Divisional.
Adhocracy/innovative

Question 10

Entrepreneurial structure is based around owner manager, making all key decisions. What are the advantages and disadvantages of this?

Answer 10

Advantages – fast, decision-making, more responsive to market, good control, close bond to workforce.
Disadvantages – lack of career structure, maybe too centralised, cannot cope with Diversification/growth 

Question 11

As organisations grow, they tend to move from entrepreneurial structure to functional structure. How is this separated and what are the advantages and disadvantages?

Answer 11

Port of directors at top – marketing department – production department – finance department – HR department
Advantages – economies of scale, standardisation/efficiency, specialist, more comfortable
Disadvantages – empire building, slow to adapt to market changes, conflicts between functions, cannot cope with diversification

Question 12

How is divisional structure organised?

Answer 12

Board of directors – chemicals division – plastics division – electricals division – paper division
Advantages – enables product or geographical growth, clear, responsibility, and accounting for products, training of general managers.
Disadvantages – potential loss of control, lack of gold, congruence, duplication, specialist may feel isolated

Question 13

What is the matrix structure?

Answer 13

Aims to combine the benefits of the divisional structure, and the functional structure usually found in multiproduct multifunctional organisations.
Advantages - flexibility.
Disadvantages – dual command, dilation of functional authority, time-consuming meetings 

Question 14

What is centralisation and decentralisation?

Answer 14

(De) Centralisation refers to the degree of autonomy/decision-making ability diffuse throughout the organisation.
Advantages – senior management, free to concentrate on strategy, better, late, court decisions, better, motivation, quicker, responses, flexibility, training, career, path
Disadvantages – loss of control by senior management, dysfunctional due to lack of gold, congruence, poor decisions, made by an experienced managers, extra costs

Question 15

What factors affect the degree of decentralisation?

Answer 15

Management style and ability
Size of organisation.
Range of products/services/brands.
Geographic, location

Question 16

What is the span of control?

Answer 16

Span of control considers how many people report to one superior.
Narrow span of control is tool has many managerial levels.
Wide span of control is flat and has fewer managerial levels

Question 17

What are the advantages and disadvantages of tall organisations?

Answer 17

Advantages – more promotional opportunities, more supervision, smooth, the progression from one level to another, small spans of control, lead to more personal contact with manager.
Disadvantages – inhibits the delegation, more expensive in terms of management, overheads, extra levels of management, slow down, decision-making communication

Question 18

What are the advantages and disadvantages of fat organisations?

Answer 18

Advantages – wide span of control encourages more delegation, lower management costs, better communication between top management and workers.
Disadvantages – managers may be overworked as they have more people to supervise, great to delegation means less central control

Question 19

What factors influence the span of control?

Answer 19

Complexity of work.
Degree of change.
Managers ability
Assistance received.
Amount of nonsupervisory Work.
Level of knowledge and experience.
Level of cost associated with mistakes.
Level of danger.
Physical proximity of subordinates/geography

Question 20

Burns and stalker summarise, two extremes of structure. What are they what are their functions? 

Answer 20

Mechanistic – rigid and formalised – formal, hierarchical, authority, and control based, focuses on efficiency
Organic – fluid and flexible – informal, flat, project teams, power, based on expertise

Question 21

What is a sole trader and what are the advantages and disadvantages?

Answer 21

A single proprietor, taking all the risks and enjoying all the rewards.
Advantages – no need to share profits, self-sufficient, and independent, little or no regulation, own boss.
Disadvantages – unlimited liability, high risk that 75% of small businesses fail in the first four years, problems, raising finance, small so hard to negotiate, competitively with suppliers, totally dependent on health proprietor, can’t use floating charges

Question 22

What is a partnership and what are the advantages and advantages?

Answer 22

Two. More people who own a business taken all the risks and enjoying all the awards.
Different forms of partnerships include general partnerships – no several legal identity, limited partnerships, a separate legal identity exist, meaning that liabilities Ltd
Advantages - Few regulatory obligations, range of skills, and experience, more owners to put finance in, business not dependent on health of one person
Disadvantages – each partner has unlimited liability, potential disagreement

Question 23

What a limited company, and what are the advantages and disadvantages?

Answer 23

A company as a separate legal entity from its owners – shareholders.
Two main forms private LTD, public plc.
Advantages – liability of shareholders is limited, ownership transferred easily, easier to raise capital, can use floating and fixed charges
Disadvantages – legal burdens, quoted companies can suffer from short-term ice pressure, financial statements open to public scrutiny

Question 24

What are alliances and what are the associated issues?

Answer 24

There are various ways in which businesses can work together – joint ventures a separate own company, licensing/franchising one company allows another to malefaction market its product, strategic alliances loose collaboration e.g. airlines, agency agreement where one party distribute another’s products
Issues to consider – sharing Risks and returns, splitting out costs, potential conflicts, potential to gain expertise, allowing others access to information 

Question 25

What are groups and what are the advantages and disadvantages?

Answer 25

A number of companies and one common control
Parent company and sufficient number of shares to exercise control over subsidiary.
Advantages – different companies can be responsible for different products, easy to sell off, economies of scale, three vertical integration.
Disadvantages – consolidation of accounts must be prepared, some acquisitions, add negative shareholder value