Organization Of Business Flashcards
What are basic organizational structures that might exist within any entity or part of an entity?
a) an entrepreneurial structure
b) a functional structure
c) a divisional structure
d) a matrix organization.
Explain a entrepreneur’s structure of a business?
An entrepreneur business doesn’t need an formal business structure, because all decisions are taking by the owner, however, on expansion of business, a formal management structure is evident.
Explain a Functional business structure?
A functional structure is where individual people with similar interest, tasks and functions are grouped together. they are allocated task accordingly. This form of structure is often used in small to medium sized company.
Which business structure could cause an issue of homogenity?
Functional structure.
What is a divisional structure?
A divisional organization is basically a more detailed form of functional structure in which, if a company has 3 products, then each product will have its own marketing, finance, advertising, selling and production department, thus, making it easier to be functioned.
State 4 types of divisional structures.
Product division
Customer Division
Process Division
Geographical Division
How does a product division structure works?
is structured according to its product lines, Each division has its own research and development group, its own manufacturing operations, and its own marketing team.
What is a downside of a product line structure?
A downside is that it results in higher costs as corporate support services (such as accounting and human resources) are duplicated in each of the four divisions.
How does a customer division structure works?
it enables them to better serve their various categories of customers.
e.g operating companies are grouped into three customer-based business segments: consumer business (personal-care and hygiene products sold to the general public), pharmaceuticals (prescription drugs sold to pharmacies), and professional business (medical devices and diagnostics products used by physicians, optometrists, hospitals, laboratories, and clinics.
How does a production structure works?
If goods move through several steps during production, a company might opt for a process division structure. e.g, a company makes a chair, and they move the designing part to another part of the company. then finishing is being done by part of another company.
How does a Geographic structure works?
It enables companies that operate in several locations to be responsive to customers at
a local level.
Explain a matrix organization?
A matrix organization is a company structure where teams report to multiple leaders. The matrix design keeps open communication between teams and can help companies create more innovative products and services. Using this structure prevents teams from needing to realign every time a new project begins.
What is the core difference b/w project organization v matrix organization?
The difference between a matrix organization structure and a project organization is that with a project organization, the project management comes to an end when the project ends. With matrix organization, the matrix structure of authority and command is permanent.
Define a virtual organization?
The virtual company or virtual organization does not have an identifiable physical existence, in the sense that it does not have a head office or operational premises. It might not have any employees or assets.
What are 6 key elements of an organization structure?
departmentalization, chain of command, span of control, levels of management, centralization or decentralization of decision making, and work specialization
