structures

• tall organisation structure


  many levels of hierarchy, narrow span
• flat organisation structure


  few levels of hierarchy, wide span
• advantages of a tall organisation structure

  more opportunities for promotion lead to greater staff motivation, staff gain more support from their line manager, higher degree of supervision as each line manager has a limited number of people they are responsible for
• disadvantages of a tall organisation structure

  many levels of hierarchy, communication is slower as instructions take longer to travel through the levels of the organisation due to long chain of command, less responsive to change, high wage costs
• advantages of a flat organisation structure

  few levels of hierarchy, more responsive to change and decision-making due to short lines of communication, staff are empowered to work independently and take on more responsibility
• disadvantages of a flat organisation structure

  employees feel stressed and managers overstretched by wide span of control, less promotion opportunities lead to the company losing staff to other organisations
• delayering

  layer of management removed but same level of output expected to reduce costs
• advantages of delayering

  managerial wages saved, more responsive to change, better communication
• downsizing

  when a firm closes down or merges aspects of their operations
• advantages of downsizing

  reduce costs, remain competitive in the market, remaining staff feel their importance has been recognised
• centralised organisation

  where most decisions are taken by senior managers and then passed down the organisational hierarchy
• advantages of centralised organisations

  greater uniformity, easier to promote a corporate culture, decisions made by experienced senior managers
• disadvantages of centralised organisations

  less responsive to localised external pressures, demotivated staff because they're uninvolved with decisions, stifles creativity of the staff, staff are unprepared for promotion
• decentralised organisation

  delegate authority down the chain of command
• advantages of decentralised organisations


  reducing speed of decision-making, more responsive to changes, greater local knowledge
• disadvantages of decentralised organisations

  poor decisions as branch managers are not as experienced as senior managers, branches may begin to compete, corporate culture is harder to develop
• matrix structure

  when cross functional teams are created to run a project, members come from different disciplines and disband when project is complete, used when the business is involved in a number of large simultaneous projects
• advantages of matrix structure

  includes different viewpoints and skills, staff have an opportunity to learn new skills from others, greater motivation and productivity, complex problems solved effectively, no need to fund the structure permanently
• disadvantage of matrix structure

  very expensive, members have priority issues when having to report to two bosses, confusion and conflict between the functional department and the project
• entrepreneurial structure

  when the major decisions are made by one or two key personnel (in small businesses it is the entrepreneur)
• advantages of entrepreneurial structure

  decisions made quickly by experienced entrepreneur, decisions are made to benefit the organisation, staff know who they are accountable to
• disadvantages of entrepreneurial structure

  heavy workload for decision makers, no decisions can be made when they are absent, demotivated staff, stifles staff creativity
• functional grouping

  when the organisation is split into departments of the business' core activities
• advantages of functional grouping

  staff become experts in their own field, clear structure, excellent communication and cooperation, staff know where to find specific expertise
• disadvantages of functional grouping

  staff loyalty is to the department, communication barriers between departments, some problems cannot be solved by a single department, some decisions take a long time to be made
• product/service grouping

  when an organisation is divided into divisions based on a product they make or a product range
• advantages of product/service grouping

  each division will be a self contained unit, product expertise developed in each division, easier to see which products are doing well, quicker responses to external changes
• disadvantages of product/service grouping

  each division requires its own support staff so there will be duplication of personnel, divisions will compete, difficult to share R&D or equipment across divisions
• customer grouping

  when an organisation divides its operations by types of customer
• advantages of customer grouping

  customer loyalty as they are seen as a priority, services can be tailored to each group or a specific customer, customer receives a personal service even in a large firm, organisation can respond faster to customer's needs
• disadvantages of customer grouping

  time consuming administration as each customer takes time and effort to meet, large administration and staffing costs, if staff change positions personal service lost, duplication of personnel and resources, competition between groups
• territory grouping

  where the organisation divides its operations by geographical area, common among large multinationals
• advantages of territory grouping

  local offices have local knowledge for the local client's needs, local offices can overcome language and culture barriers, local office held accountable for the success or failure of the area, customer loyalty can be built through a personal local service, local office is more responsive to changes in customer's needs
• disadvantages of territory grouping

  time consuming administration, large administration and staffing costs, if staff change positions personal service lost, duplication of personnel and resources
• technological grouping

  where the organisation divides its operation by the type of technology they require, common among the manufacturing industry
• advantages of technological grouping

  increased specialisation in production process, good for large organisations with different production processes, problems with the technology can be easily identified, reduce wastage and costs
• disadvantages of technological grouping

  high degree of specialised staff training needed, duplication of resources, capital intensive so very expensive, only good for large organisations with different production processes