E1 > 7. Structre > Flashcards

7. Structre Flashcards

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1
Q

What was the traditional role of the finance function?

A

To generate information

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2
Q

What are the five components of an organisation according to to Henry Mintzberg

A

Strategic Apex
Technostructure
Support Staff
Middle Line
Operating Core

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3
Q

What is the strategic apex

A

Drives the direction of the business through control over decision-making

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4
Q

What is the technostructure

A

Analysts and technicians and skilled professionals that can
Drives efficiency through rules and procedures

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5
Q

What is the operating core

A

Performs the routine activities of the organisation in a proficient and standardised manner

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6
Q

What is the middle line

A

Performs the management function of control over resources, processes and business areas

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7
Q

What is meant by the support staff

A

Provides expertise and service to the organisation

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8
Q

What are the potential configurations of Mintzberg’s five components

A
  • Simple structure
  • Machine Bearaucracy
  • Professional bureaucracy
  • Divisionalised/Conglomerate
  • Adhocracy
  • Missionary
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9
Q

What is the simple structure

A
  • Strategic Apex is dominant
  • Direct supervision- exercises coordination and control
  • Effective in small, simple, dynamic organisation
  • Flexibility
  • Entrepreneurial structure
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10
Q

What is meant by machine bearaucracy

A
  • Technostructure is dominant
  • Standardisation of work processes exercise coordination and control
  • Heavily unionised business
  • Complex stable environment focused of improving performance
  • Functional structure
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11
Q

What is meant by professional bearaucracy

A

Operating core is dominant
- Processes are too complex to be standardised
- Individual trainng and expertise is most valuable
- Complex and stable environment
- Standardisation of skills/knowledge: coordination and control

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12
Q

What is divisionalised or conglomerate configuration

A
  • Middle line is dominant
  • Large organisation or too complex to be managed by one unit and is split into divisions
  • Static and diverse environment
  • Standardisation of outputs: coordination and control
  • Divisional structure
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13
Q

What is meant by the adhocracy configuration

A

-Support staff and dominant as they provide continuity
- Operating core is also important
- Dynamic and innovative environment
- Complex project based works with few formal controls
- Mutual adjustment: coordination and control
- Matrix structure

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14
Q

What is meant by the missionary configuration

A
  • Little structure or formal control
  • Held together by shared values and strong culture
  • Standardisation of norms: coordination and control
  • Effective in start-ups or campaigning groups
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15
Q

What is the direct supervision method of coordination and control

A

A formal hierarchy where manager supervises the work of subordinates

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16
Q

What is standardisation of work process method of coordination and control

A

Work tasks are established and set out in rules and operating procesdures

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17
Q

What is standardisation of skills and knowledge as a method of coordination and control

A

Focus is on identifying training needs to do their job

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18
Q

What is the standardisation of outputs as a method of coordination and control

A

Specifications are set for the service or product being made

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19
Q

What is the mutual adjustment method of coordination and control

A

Informal contact between employees and mangers to coordinate work

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20
Q

What is the standardisation of norms method to coordination and control

A

The organisation’s culture provides expectations for all employees

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21
Q

What are traditional organisational structures

A
  • Functional structure
    -Geographic or divisional structure
  • Matrix structure
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22
Q

What is a functional structure

A

Group employees by specialism or skill sets such as finance

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23
Q

What is meant by the geographical/divisional structure

A

The organisation is arranged according to geographical area

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24
Q

What is the matrix structure of an organisation

A

The organisation uses cross-functional teams
- eg. for project-based services
- mainly linked to adhocracy configuration

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25
What are contemporary organisational structures
- Boundaryless organisations: - Shamrock organisation
26
What is meant by boundaryless organisations
Minimise or eliminate formality to focus on speed and flexibility
27
What are the types of boundaryless organisations
- Virtual: organisation only exists electronically without any premises - Modular: The manufacturing process is broken down into units or production is outsourced - Hollow: Split their activities into core and non-core. Core activities are tragically important and kept in-house whilst non-core is outsourced
28
What is a shamrock organisation
- Driven by pressure to reduce personnel costs, flexible firm - Four parts: Professional core: main workers who define the organisation's competence Self-employed core: support professionals and are hired on contract Contingent core: Low-level routine jobs Consumers: some organisations enlist customers help
29
What are other types of new organisations
- Flatter structures- fewer layers - Horizontal structures - multifunctional project teams - Chunked structures or unglued structures: smaller and flexible units within the overall structure - Output focused structure: focus on the result rather than the process - Jobless structure: changing pool of freelancers
30
What is the scalar chain and span of control
- As organisations become bigger- different organisational structures may be suitable Scalar chain: levels in the organisations Span: control of the number of employees managed
31
What is meant by delayering
Reduction of the number of management levels from the bottom to the top - Organisations are increasing average span of control to reduce middle management
32
What is horizontal integration
Developing competitor or complementary activities
33
What is verticle integration
The company expands backwards or forwards within its existing value network and becomes its supplier or distributor
34
What is an alliance
When an organisation works with external entities
35
What are the types of alliances
Joint Ventures Licences Franchises Consortia Agents Strategic alliance
36
Join venture
two organisations set up a new shared organisation
37
Liscence
granting permission to another company to manufacture or sell product
38
Franchising
The franchisee manufactures or distributes the product while the franchiser retains control of the brand and marketing
39
Consortia
short-term legal entities aim to deliver a specific product
40
Agents
Use of agents as distribution channel
41
Strategic alliance
Sharing of resources and activities to pursue strategy Contractual agreements - similar to joint ventures although no separate company is formed
42
What was the traditional structure of the finance function
Hierarchical or triangular shape
43
What is the segregated structure of the finance function
Some parts of the finance function were moved to the shared service centres The bottom half of the triangle - routine, lower level accounting operations migrated to shared service centres- centralised
44
What is the digital age pentagon/diamond structure of the finance function?
- Flat top: collaborative financial leadership - Strategic business partnering to create and preserve value - Central bulge: digital centres of excellence - Managing processes and applying accounting rules to assemble and extract data
45
Describe the Level 1 finance leadership level
Type of system: Governance Outcome: oversight Gartner model: Predictive, Descriptive and Cognitive Technology: AI, prediction tools, Business intelligence systems Role of accounting: enabling value creation, allocation of resources
46
Level 2 - Value partnering
Types of system: Engagement Outcome: foresight Gartner model: Diagnostic, predictive, prescriptive Technology: AI, Visualisation, final stages of BI Role of accounting: Shaping how value is created and enabling Focus: quality decision-making and judgement
47
Level 3 Insight generation
Types of system: interpretation Outcome: insight Gartner model: diagnostic Tech: AI, Natural language processing, middle stages of BI Role of accounting: narrating, begins to shape how organisations create and preserve value Focus: Compliance
48
Level 4 Data extraction
Type of system: recording Outcome: Hindsight Gartner model: descriptive Technology: Robotic process automation, early stages of BI Role of accounting: gathering information Focus: quality and integrity of data
49
What are shared service centres
Centralising operations that previously existed in more than on part of the organisation 'internal outsourcing'
50
What are the benefits of shared service centres
Cost savings Standardisation of processes Selection and delivery of best practice Improved control and quality Consolidation of information system
51
What are the risks of shared service centres
- HR Issues - redundancy and impact on morale - Insufficient funds to establish - Consolidating systems will be costly, complex and time consuming - Language, cultural and reporting barriers
52
What are the requirements to establish a successful SSC
Commitment to continuous improvement Clear scope and delegation of responsibility A clear vision of the role of SSC in the organisation Buy-in to change Strong customer-focused culture Senior management commitment
53
What is outsourcing
Involves an organisation sub-contracting business activities to an external provider
54
What are the three types of competence in regard to outsourcing identified by Lonsdale and cox
- Core competencies: fundamental to firm's competitive advantage so should not be outsourced - Complementary competencies: can be outsourced but technical complexity so should only be given to trusted source - Residual competency: outsourced at arms length
55
What are advantages of outsourcing
- Reduces costs - Enables structural changes - Access to expertise and resources - Enable finance tea to concentrate on becoming business partners
56
What are the disadvantages of outsourcing
- Investment is needed to manage relationships with outsourcing companies - Disruption to business and resistance to change - Loss of control over function -Increase risk due to loss or data breaches - loss of internal knowledge and expertise
57
What are service level agreements
SLAs - legally binding contracts made between customers and outsource partners that agree on the type of service provided - Description of service - targets, expectations, cancellation procedures
58
What are transaction costs
Incurred by an organisation as a consequence of having business activities performed by third parties
59
What are non standard prducts which have high transaction costs
- Search and information costs: determining which products are needed and selecting suppliers at appropriate cost and quality - Bargaining costs: negotiating deal with the supplier - Policing and enforcement costs: monitoring whether supplier adheres to expectation
60
What is the transaction cost theory
Williamson: organisation has choice of whether to produce goods itself or through third party: - Hierarchy solution: do it itself - Market solution: enter a contract and buy asset outside the organisation
61
What are the factors that determine whether hierarchy or market solution to be picked
Uncertainty: It is difficult to arrange contracts Frequency: more likely to be outsourced if it's infrequent Asset specificity: when assets are specific it is preferred to be done in-house due to the high transaction cost
62
What are the six main types of asset specificity
- Site specificity: immobile - Physical asset specificity: customised for a specific purpose -Human asset specificity: workers acquire knowledge of a specific role which has higher value in the role than outside of it - Brand name capital specificity: brand name associated with specific activity - Dedicated asset specificity: Assets acquired solely for work undertaken for a specific customer - Temporal specificity: activities require perishable goods
63
What is business process re-engineering
Organisations transforming business processes and re-design them from the ground up 'radical re-design'
64
What are the four themes of BPR
Process reorientation: focus on resources, tasks and constraints Creative use of IT Ambition Challenge and break rules
65
What is offshoring
Relocation- involves migrating some parts of an organisation's activities to another country
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