Organisational designs

Question 1

What is an organisational design ?

Answer 1

The process of aligning the structure of a business with its aims and objectives, in order to improve efficiency and effectiveness

Question 2

What is authority ?

Answer 2

The power of a person to use and allocate resources in order to achieve business objectives

Question 3

What are the two types of authority ?

Answer 3

Centralised and decentralised

Question 4

What is responsibility ?

Answer 4

The duty or obligation to perform and complete a task to the required standard

Question 5

What is a hierarchy of a business ?

Answer 5

The order or levels of management from the highest to the lowest rank

Question 6

What is the chain of command ?

Answer 6

The way authority to take decisions is organised by passing down the levels of hierarchy

Question 7

The longer the chain of command … ?

Answer 7

The slower communication and decision making

Question 8

What is the span of control ?

Answer 8

The number of employees working directly under a manager

Question 9

What are the two types of span of control ?

Answer 9

Narrow and wide

Question 10

What does a wide span of control do ?

Answer 10

Employees will have a greater decision making powers in the business, improving job satisfaction

Question 11

What does a narrow span of control do ?

Answer 11

Employees will have fewer decision making powers, meaning closer supervision

Question 12

What is delegation ?

Answer 12

The passing of authority down the hierarchy

Question 13

What is empowerment ?

Answer 13

Delegating responsibility to employees

Question 14

What does empowerment allow employees to do ?

Answer 14

Use their abilities and have a greater say in the decision making process

Question 15

What is delayering ?

Answer 15

Reducing the levels in the hierarchy, hence chain of command by removing levels of management

Question 16

What are the five types of organisational structures ?

Answer 16

1. Centralised and decentralised
2. Tall, flat and matrix

Question 17

What is an organisational structure ?

Answer 17

The way in which the workforce within a firm is organised

Question 18

What is a centralised structure ?

Answer 18

Responsibility for decision making is maintained at the top of the hierarchy by a limited number of senior managers

Question 19

What are the advantages of a centralised structure ?

Answer 19

1. Senior manages have more control and make standardised decisions
2. Easier to implement common policies and practices
3. Prevents other parts of business becoming too independent
4. Quicker decision making
5. Stronger leadership

Question 20

What are the disadvantages of a centralised structure ?

Answer 20

1. Little flexibility to make adjustments
2. Junior staff may feel undervalued and look elsewhere for jobs
3. Bureaucratic
4. Local/ junior managers are closer to customer needs
5. Lack of authority reduce manager motivation

Question 21

What is a decentralised structure ?

Answer 21

Responsibility for decision making is delegated to several middle managers throughout the hierarchy

Question 22

What are the advantages of a decentralised structure ?

Answer 22

1. Decisions made closer to customers
2. Better able to respond to local circumstances
3. Improve staff motivation
4. Good way of training and developing junior management

Question 23

What are the disadvantages of a decentralised structure ?

Answer 23

1. Only looks at small part of business - local manager
2. Harder to ensure consistent practices and policies at each location
3. May be diseconomies of scale
4. Weaker leadership
5. Harder to achieve tight financial control

Question 24

What is a tall organisational structure ?

Answer 24

Many levels of hierarchy and narrow span of control

Question 25

What are the advantages of a tall organisational structure ?

Answer 25

1. Good prospects of promotion
2. Staff gain more support from line manager
3. Higher degree of supervision

Question 26

What are the disadvantages of a tall organisational structure ?

Answer 26

1. Expensive to run
2. Longer lines of communication can make the firm less responsive to change
3. Many levels of hierarchy

Question 27

What is a flat organisational structure ?

Answer 27

Few levels of hierarchy and wide span of control

Question 28

What are the advantages of a flat organisational structure ?

Answer 28

1. Shorter lines of communication so firm more responsive to change
2. Few levels of hierarchy
3. More empowerment to work independently and responsibly

Question 29

What are the disadvantages of a flat organisational structure ?

Answer 29

1. More delegation = stress and overstretched
2. Less promotional opportunities

Question 30

What is a matrix structure ?

Answer 30

Individuals work across teams and objects as well as within their own department

Question 31

What are the advantages of a matrix structure ?

Answer 31

1. Help break departmental barriers
2. Improve communication across organisation

Question 32

What is a disadvantage of a matrix structure ?

Answer 32

Members of project teams may have divided loyalties as they report to two managers

Question 33

What are the advantages of changing organisational structures and delayering ?

Answer 33

1. Moving to tall structure = greater control over staff lower in organisation
2. Delayering = more empowerment and better/quicker communication

Question 34

What are the disadvantages of changing organisational structures and delayering ?

Answer 34

1. Flat and matrix structure = may not run effectively
2. Matrix structures = may have little accountability where teams formed and dispersed quickly
3. Delaying / flat structures = managers may have excessive workloads and staff becoming less productive if not well trained in wider roles