Unit 2: Organisation and management (Chap 7) Flashcards
1
Q
What are the keywords for this chapter? (Chap 7)
A
- Organisational structure
- Functional departments
- Hierarchy
- Chain of command
- Subordinate
- Span of control
- Delayering
- Centralised and decentralised organisation
- Directors
- Annual General Meeting
- Chief executive officer
- Manager
- Supervisor
- Delegation
- Autocratic and democratic leadership
- Laissez-faire leadership
- Trade union
2
Q
What are the main activities of business?
A
- Finance
- Marketing
- Operations
- Human resources
- Research
- Developments
3
Q
What are the levels of hierarchy in an organisational structure?
A
- Chief executive officer (CEO)
- Directors (5 people)
- Managers (15)
- Supervisors (30)
- Number of employees (Uncountable)
4
Q
Info about the chain of command in a business
A
- Not possible for the CEO to have effective control of all employees
- Day-to-day control of employees becomes the responsibility of managers lower down the hierarchy
- Each person in the chain of command is directly responsible to the person immediately above them and directly responsible for the person(s) directly below them
5
Q
What are the two types of span of control?
A
Wide and narrow
6
Q
Wide span of control
A
A manager with a wide span of control oversees a large number of people.
7
Q
Narrow span of control
A
A manager with a narrow span of control is responsible for a small number of people.
8
Q
Factors that affect the size of the span of control: Difficulty of tasks
A
- If the work that subordinates do involves simple and repetitive tasks, then a wide span of control can be used. - The more complex the tasks are for subordinates, the more likely a narrow span of control will be used.
9
Q
Factors that affect the size of the span of control: The experience and skills of employees
A
- Highly experienced employees may require less control than those who are less experienced. - Highly experienced subordinates will probably have a wider span of control.
10
Q
Factors that affect the size of the span of control: Size of business
A
- Larger businesses are often able to afford to employ more managers than smaller business. - The span of control of individual managers in a large business is often narrower than that for managers in small businesses.
11
Q
Factors that affect the size of the span of control: Levels of hierarchy
A
Managers in tall organisation structures will usually have narrower spans of control than managers in flat organisation structures.
12
Q
Factors that affect the size of the span of control: Management style
A
Some businesses use a management style than has more control over the workforce. Managers have a narrow span of control.
13
Q
Advantages of a wide span of control
A
- Less expensive as fewer managers/supervisors are needed
- Less supervision improves employees motivation
- Faster communication and decision-making
14
Q
Disadvantages of a wide span of control
A
- Fewer managers/supervisors reduces promotion opportunities
- Less control over subordinates’ work
- Effective communication may be difficult
15
Q
Advantages of a narrow span of control
A
- Effective communication is easier
- Better control over employees and their work
- More managers/supervisors increases promotion opportunities
16
Q
Disadvantages of a narrow span of control
A
- Communication and decision-making are often slower
- More expensive because more managers are needed
- More supervision may reduce employee motivation
17
Q
What is a tall organisational structure?
A
- Many levels of hierarchy
- Each layer, other than the bottom layer, is a layer of management
- More managers so a narrow span of control
- Long chain of command
- Communication and decision-making are slower since they must pass through several layers
18
Q
What is a flat organisational structure?
A
- Few levels of hierarchy
- Short chain of command
- Communication and decision-making is much faster
- Few managers so wide span of control
19
Q
Notes on delayering
A
- Sometimes a business with a tall organisational structure will reduce the levels of its hierarchy to save costs
- Usually involves cutting out middle management (they may manage finance, marketing, etc.)
20
Q
Advantages of delayering
A
- Reduces costs
- Lowers the chain of command so communication and decision-making should be quicker
- Wider span of control increases the opportunity for delegation (passing authority down through the organisational hierarchy to a subordinate)
- Delegation develops employees’ skills
- Senior managers are in closer touch with what is happening in the business
21
Q
Disadvantages of delayering
A
- Increased workload for managers who remain could mean that tasks aren’t completed on time
- Businesses may have to make redundancy payments to managers who lose their jobs
- Employees who remain might fear redundancy and this reduces job security
- Wider span of control after delayering might reduce the effective management of subordinates
22
Q
Notes on a centralised organisation
A
- Decision-making power is held by senior managers
- Then passed down to lower levels in the hierarchy through the chain of command
- Many international franchise companies, such as Pizza Hut have mainly centralised organisation structure
- This is to control what each franchised outlet offers to customers
- Pizza Hut needs to make sure that customers receive the same level of service and quality products in every one of its outlets
23
Q
Notes on a decentralised organisation
A
- The authority to make some decisions is delegated to lower levels in the hierarchy
- Or managers in the case of a business with several production facilities or operating in various locations
- Example is Avari Hotels Ltd, Pakistan
- The company directors are based in the head office in Karachi, although each of its hotels in Pakistan and Dubai has managers who make decisions about how to best run their hotels
24
Q
Advantages of a centralised organisation
A
- Quicker decision-making
- Decisions are taken for the benefit of the whole business
- Greater use of specialist staff improves decision-making
25
Disadvantages of a centralised organisation
- Slower communication
- Unable to respond quickly to changes in local markets
- May reduce employee motivation
26
Advantages of a decentralised organisation
- Decisions are made based on local needs
- Can be used to train junior managers
- Delegation helps to improve employee motivation
27
Disadvantages of a decentralised organisation
- Decisions taken might not be in the interests of the whole business
- Poor decisions might be made because managers lack skills and experience
28
Notes on Directors
- Directors are the most senior level of management in any limited company
- May be employees of the business and responsible for a specific function
- E.g. marketing director or operations director
- Some directors may be at the Annual General Meeting (AGM)
29
What are the director's responsibilities?
- Setting strategy - long-term plans for the business
- Making sure that the resources are available to achieve objectives
- Reviewing the performance of managers
- Protecting the interests of shareholders and other stakeholders
- Providing leadership to ensure the success of the business
30
What are the main responsibilities of all departmental managers?
- Making sure the decisions of the directors are carried out
- Delegating tasks to members of their department
- Taking the decisions needed to achieve departmental targets
- Motivating employees in the department so that they work hard to achieve the department's and the company's objectives
- Solving day-to-day problems that may arise within the department
31
What are the 5 functions of management?
- Planning
- Organising
- Commanding
- Coordinating
- Controlling
32
Planning
- Looking at where the business is now and where it wants to be in the future
- Managers must set clear objectives on how this will be achieved
33
Organising
- Preparing and organising the resources needed to achieve the planned objectives
- Managers will have to decide the best way of completing important tasks at the lowest cost
34
Commanding
- The control and supervision of subordinates
- Aim to motivate employees towards achieving the planned objectives
35
Coordinating
Making sure all the different parts of the business are working together towards achieving the business's goals and corporate objectives.
36
Controlling
- Checking to make sure the plan is working
- Must be completed on time and to the required standard
37
Notes on delegation
- Not possible for managers to complete all business tasks
- May not have the time or necessary skills
- They need to delegate some of the tasks to employees in a lower level of the business, subordinates
38
Advantages of delegation
- Managers have time to focus on important complex tasks
- Motivates employees who are given the chance to take on responsibility and develop their skills
- Lower-level employees usually have better skills than their managers for completing certain tasks
39
Disadvantages of delegation (for the manager)
- Some managers fear they will lose control of decision-making
- May feel threatened by subordinates who can complete a task to a better standard than the manager
