organisational design

Question 1

organisational structure

Answer 1

shows how people and management are organised in business

Question 2

what does organisational structure determine: (4)

Answer 2

• authority + responsibility
• individual job roles + titles
• people to whom others are accountable
• formal routes through which communication flows

Question 3

factors that influence organisational structure: (4)

Answer 3

• size of business
• type of business
• management + leadership style
• competitive environment

Question 4

what does organisation structure also show:

Answer 4

• span of control
• line management
• chain of command

Question 5

span of control

Answer 5

the number of employees for whom a manager is responsible

Question 6

narrow span of control (3)

Answer 6

• allows for closer supervision of employees
• more layers in the hierarchy
• helps more effective communication

Question 7

wide span of control (2)

Answer 7

• gives subordinates the chance for more independance
• more appropriate is labour costs are significant (reduce number of managers)

Question 8

what does span of control depend on? (4)

Answer 8

• personality + skill (experiance of manager)
• size + complexity of the business
• whether the business is centralised or decentralised
• extent use of clear objectives throughout a business

Question 9

chains of command

Answer 9

describes the lines of authority within a business

Question 10

levels of hierarchy

Answer 10

the number of layers of management or supervision in the organisation structure

Question 11

tall hierarchical structure

Answer 11

• many levels
• narrow span of control

Question 12

flat hierarchical structure

Answer 12

• flat hierarchy
• wide span of control
• delegation encouraged

Question 13

positives of tall hierarchical structure

Answer 13

• allows tighter control (less delegation)
• more oppotunities for promotion

Question 14

negatives of tall hierarchical structure

Answer 14

• takes longer for communication to pass through layers
• more layers = more staff = higher costs

Question 15

positives of flat hierarchical structure

Answer 15

• vertical communication is improved
• fewer layers = less staff = lower costs
• staff given greater responsibility

Question 16

negatives of flat hierarchical structure

Answer 16

• less direct control
• fewer opportunities for promotion

Question 17

matrix structure

Answer 17

individuals work across teams + projects as well as within their own department or function

Question 18

advantages of matrix structures (5)

Answer 18

• helps to break down department barriers, improves communication
• individuals get to use their skills in different contexts
• results in greater motivation
• encourages the sharing of good practise + ideas
• good way of sharing resources across all departments

Question 19

disadvantages of matrix structures (5)

Answer 19

• members of teams may have divided loyalties as they report to 2 managers
• may not be a clear accountability
• difficult to coordinate
• team members may neglect their functional responsibilities
• takes time to get used to working in the structure

Question 20

why change the organisational structure?

Answer 20

• growth of the business means a more formal structure is appropriate
• reduces cost and complexity
• employee motivation needs boosting
• customer service improvements

Question 21

challenges of changing the organisational structure

Answer 21

• manager + employee resistance
• disruption + demotivation = potential problems with staff retention
• costs (eg redundancies)
• negative impact on customer service or quality

Question 22

delayering

Answer 22

removing layers of management from the hierarchy of the organisation

Question 23

benefits of delayering

Answer 23

• lower labour costs
• faster decision making
• shorter communication paths
• stimulating employee innovation
• greater emphasis on teamworking

Question 24

delegation

Answer 24

the assignment to others of the authority for particular functions, tasks and decisions

Question 25

advantages of delegation

Answer 25

• reduces management stress + workload
• allows senior management to focus on key tasks
• subordinates are empowered and motivated
• good method of on-the-job training

Question 26

disadvantages of delegation

Answer 26

• cannot delegate responsibility
• depends on quality
• harder in a small firm
• may increase workload and stress of subordinates

Question 27

employee empowerment

Answer 27

giving employees the power to do their job

Question 28

empowerment

Answer 28

• employees need to feel like their actions count
• encourages employee feedback
• showing more trust in employees
• giving authority to make decisions to front-line staff

Question 29

centralised decision making

Answer 29

businesses with centralised structure keep decision making firmly at the top of the hierarchy (amongst the most senior management)

Question 30

benefits of centralisation

Answer 30

• easier to implement common policies
• prevents other parts of the business becoming too independant
• easier to co-ordinate and control from the centre
• quicker decision making

Question 31

disadvantages of centralisation

Answer 31

• more bureaucratic (often extra layers in the hierarchy)
• lack of authroity down the hierarchy
• customer service misses flexibility and speed of local decision making

Question 32

decentralised decision making

Answer 32

decision making is spread out to include more junior managers in the hierarchy, as well as individual business units or trading locations

Question 33

benefits of decentralised decision making

Answer 33

• decisions are made closer to the customer
• better able to respond to local circumstances
• improved level of customer service
• good way of training and developing junior management
• should improve staff motivation

Question 34

drawbacks of decentralised decision making

Answer 34

• decision making is not necessarily ‘strategic’
• harder to ensure consistant practises and policies at each location
• may be some diseconomies of scale (duplication of roles)
• harder to achieve tight financial control (risk of cost overruns