Organisational structure

Question 1

Organising by function

Answer 1

Director of marketing to promotion and sales manager
Director of finance to accounts manager

Benefit
- staff in each department are experts in their area so they have good practices and develop

However
- may identify more with the department than the business

Apple

Question 2

Organising by product

Answer 2

Head of iphone to iphone 12 manager
Head of ipad to ipad design manager

Used by companies with clear product lines that have different customer bases

Example
banks have divisions based on income (high need tax advice, middle need housing)

Question 3

Organising by region

Answer 3

Head of Europe to head of UK
Head of Asia to head of china

Common structure in global businesses

Reason
- customer in different regions have different wants/needs due to laws, language barriers, culture

Amazon, Coca Cola

Question 4

Tall structure

Answer 4

Benefits
- opportunities for promotion
- narrow span of control
- can spot departments to develop as it’s clear whose responsible

Drawbacks
- less team feeling
- long chain of command (slow implementation of decisions)
- distorted messages (resistance to change)

Question 5

Flat structure

Answer 5

Benefits
- fewer managers (cut costs)
- quicker communication
- innovative as more work is delegated

Drawbacks
- mistakes as more work is delegated
- larger span of control
- less opportunities for promotion

Question 6

Matrix structure

Answer 6

Teams from different departments are created to run projects

Benefits
- good communication and share good practices across departments
- can be motivating

Drawbacks
- unclear who immediate manager is
- potential for conflicting messages from department and project managers

Question 7

Centralised structure

Answer 7

Head office makes all decisions and local branch managers have low decision making power

Benefits
- senior managers are more experienced (better/quicker decisions)
- economies of scale

Drawbacks
- stop innovation
- less delegation (less motivation)
- job satisfaction is lower

McDonald’s

Question 8

Decentralised structure

Answer 8

Tesco’s

Managers in local branches are given more decision making power

Benefits
- can motivate workers
- subordinates have better knowledge of local conditions

Drawbacks
- slow decision making (branch managers are less informed than senior managers)
- less economies of scale as different purchase orders will be done locally