Structure

Question 1

Choice of structure

Answer 1

• Functional / bureaucracy
• Divisional (geographic / product)
• Entrepreneurial
• Matrix

Question 2

Functional / bureaucratic Structure

Answer 2

Departments that are defined by their functions ie the work they do.

Pros:
Specialism means the firm is more efficient
can benefit from economies of scale

Cons:
The rigid structure is unsuitable for changing environments
bureaucracy can hamper cross functional innovation and creativity
it can lead to conflict

Question 3

Divisionalisation

Answer 3

The business can be divided into autonomous units based on geography, product or market.

Divisionalised structures can be adapted for growth and diversification and are most suitable for larger diversified businesses.

Some authority is retained at Head office but day to day service operations are handled on a territorial basis.

Question 4

Matrix Structure

Answer 4

Advantages

• offers greater FLEXIBILITY
• it provides for inter disciplinary co-operation and a mixing of skills and expertise.
• It provides for a structure for allocating responsibility to managers for end results
• it should improve communication within the organisation
• Dual authority gives the organisation multiple orientations so that the functional specialists do not get wrapped up in their own concerns

Disadvantages

• it requires consensus and agreement which may slow down decision making.
• Dual authority threatens a conflict between managers
• One individual with two or more bosses is more likely to suffer stress at work
• it is sometimes more costly
• it may be difficult for the management to accept a matrix structure. A manager may feel threatened that another manager will usurp his authority.

Question 5

Span of Control

Answer 5

Wide span of control

• good for easy repetitive work
• but loss of control

Narrow span of control

• good for specialist work
• but expensive

Question 6

Flexibility

Answer 6

Hamdy’s shamrock

• professional core
• contractual fringe
• flexible labour force
• customers

Networks
staffing (freelance v contract)
leasing
outsourcing 
customers

Question 7

Centralised vs decentralised

Answer 7

Advantages of centralisation

• goal congruence
• co-ordination
• control

Disadvantages of centralisation

• transfer pricing
• loss of local knowledge
• disincentive

Advantages of decentralisation

• quicker
• accountability.
• local knowledge
• succession
• free up senior management

Question 8

Flexible structure

Answer 8

Increasingly businesses are turning to flexible structures to allow them to adapt to changing environments. this can include creative use of:

• staffing - using freelance or contract workers
• leasing of facilities such as machienry, IT and accommodation
• Production may be outsourced, even to offshore companies where labour is cheaper
• interdependence of organisations is emphasised by the sharing of functions and services
• databases and communication create genuine interactive sharing of common data

Question 9

Boundary-less organisations

Answer 9

The removal of both internal and external barriers to facilitate collaboration internally and with external parties

Question 10

Network organisation

Answer 10

The relationships between individual organisations including outsourcing, sharing resources and collaboration on non-core activities with competitors

Question 11

Virtual organisations

Answer 11

The virtual organisation is a collective term which covers both virtual firms and virtual teams. The key characteristics are the use of internet, email extranets, cloud computing and e-conferencing

Question 12

Hollow organisations

Answer 12

Tis term refers to organisations where all non core activities have been outsourced to specialist providers

Question 13

Modular organisations

Answer 13

In this case the production process is divided into modules and each module is outsourced to a different speciliast. The modular organisation assembles and distributes the final product.

Question 14

Strategic apex

Answer 14

Is responsible to the organisation’s owners and wishes to retain control over decision making (centralisation)

Question 15

The technostructure

Answer 15

consists of analysts whose raison d’etre is design of procedures and standards

wants an environment that is standardised and highly regulated.

Question 16

Operating core

Answer 16

work directly on the product or service. They prefer to work autonomously achieving what other co-ordination is necessary by mutual adjustment.

Question 17

The managers of the middle line

Answer 17

seek to increase their autonomy from the strategic apex and to increase their control over the operating core

Question 18

Support staff

Answer 18

only gain influence when their expertise is vital.

Question 19

Corporate governance definition

Answer 19

Corporate governance is about what the board of an organisation does and how it sets the values of the organisation

Corporate governance is not concerned with formulating busienss strategy BUT taking responsibility, maintaining accountability and managing risk

Question 20

Not for profits: The Nolan Principles

Answer 20

Selflessness
Leadership
Integrity
Accountability
Honesty
Objectivity
Openness

Question 21

Overview of Corporate Governance

Answer 21

How effective is the senior management? (LEADS)

Question 22

CG: Leadership

Answer 22

• separate CEO and chairman
• 50% NEDs
• Self evaluation

Question 23

CG: Effectiveness

Answer 23

• appointments
• evaluation
• balanced
• induction
• training

Question 24

CG: Accountability

Answer 24

• internal controls
• audit committee
• risk committee
• reporting

Question 25

CG: Directors' remuneration

Answer 25

- Attract and motivate - Promote long term success - Transparency - Remuneration committee (NEDs)

Question 26

CG: Shareholders

Answer 26

- the knowledge gap - open dialogue - constructive use of AGM