Grouping

Question 1

activities can be organised in what 5 ways?

Answer 1

• functional grouping
• product/service grouping
• place/territory grouping
• customer grouping
• technology grouping

Question 2

what problems to grouping activities prevent?

Answer 2

• a disorganised workforce
• poor productivity
• duplication of resources

Question 3

what is functional grouping?

Answer 3

this is when an organisation is split into departments which represents the main functional areas which are all essential to the running of an organisation.

Question 4

what are the main functional areas which are essential to the running of an organisation?

Answer 4

• HR (staff)
• marketing
• finance
• operations
• administration

Question 5

what are the advantages to functional grouping?

Answer 5

1. resources are better used
2. allows for specialisation in each field
3. communication and cooperation are done well
4. clear structure
5. clear lines of authority

Question 6

what are the disadvantages to functional grouping?

Answer 6

1. satff loyalty is to the department rather than the organisation
2. communication barriers and rivalries can exists between departments
3. some problems cannot be solved by a single department.
4. decision making can be slow as all departments must be consulted

Question 7

what is product grouping?

Answer 7

the organisations activities are grouped around the different products or services that provides. usually known as a ‘division’.
each product/service requires specialist knowledge and expertise so all staff this knowledge are grouped together in a division.
They will have their own functional staff.

Question 8

what are the advantages of product grouping?

Answer 8

1. Expertise is available.
2. Easier to spot under performing products.
3. Allows for quicker response to customer demand.

Question 9

what are the disadvantages of product grouping?

Answer 9

1. As each division has its own functional areas – duplication of task, resources and staff.
2. Divisions may find themselves competing against one another.
3. Difficult to share research and developing across divisions.

Question 10

what is customer grouping?

Answer 10

Where the individual needs of different customers are important the business will organise a way that they have close contact with their customers.
Most likely to exist in the service sector.

Question 11

what are the advantages of product grouping?

Answer 11

1. Highly responsive to customer needs this generate customer loyalty.
2. Allows personal service.
3. Customer gets the feeling of receiving a personal service.
4. Business can respond much faster to individual needs.

Question 12

what are the disadvantages of product grouping?

Answer 12

1. Record keeping and administration of this type of group can be time-consuming.
2. Large staffing costs.
3. Competition between groups can arise.

Question 13

what is geographical/place grouping?

Answer 13

Businesses who customers are located over multiple countries often organise themselves in multiple locations close to where their products are delivered e.g. multinational companies.
Allows regional managers to be appointed who can take control of the activities in their area and different market conditions.

Question 14

what are the advantages of geographical grouping?

Answer 14

1. Local offices can cater for local customer’s needs.
2. Local offices can overcome language barriers and cultural differences.
3. Specialist knowledge and marketing techniques can be used.
4. Customer loyalty can be built up through personalised service.
5. Local labour can be cheaper.

Question 15

what are the disadvantages of geographical grouping?

Answer 15

1. Administration can be time consuming.

2. Duplication of personnel and resources.

Question 16

what is technology grouping?

Answer 16

Activities are grouped around technological requirements of the product.
During manufacturing there are stages a product must go through, businesses may organise its business around each of these technical processes.
Staff do not need to learn every process, only the process which they are working within.

Question 17

what are the advantages of technology grouping?

Answer 17

1. Employees gain a degree of specialism.
2. Problems can be easily identified.
3. Reduce wastage and costs.

Question 18

what are the disadvantages of technology grouping?

Answer 18

1. High degree of specialised training required.
2. Duplication of resources.
3. Usually organisations are capital intensive which is expensive.

Question 19

what are the examples of technology grouping?

Answer 19

• Consumer Electronics
• Device solution
• IT & Mobile communications

Question 20

what does downsizing involve?

Answer 20

Downsizing looks at reducing the operating costs of the business by looking for what t does t need to spend money on.
This involves an organisation either closing an unprofitable department or branch or merging 2 divisions together.

Question 21

how is downsizing a positive?

Answer 21

This can cut costs of wages and rent while making shareholders feel more confident in the business. The business s more efficient by partnering up with more successful areas.

Question 22

how can downsizing be a negative?

Answer 22

However, valuable skills can be lost when redundancies are made. This can affect remaining staff’s motivation while generating bad publicity.