Organisational Structure Overview

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Questions and Answers

What does organisation structure primarily describe?

  • The financial assets of a company
  • The way work is divided, supervised and coordinated (correct)
  • The physical layout of an office
  • The personal relationships among employees

An organisation chart only represents the informal relationships in a company.

False (B)

What is the term used to describe the official structure documented by guidelines and procedures within an organisation?

Formal structure

Work specialisation breaks a job down into a number of steps where different individuals complete each step based on their _______.

<p>skills</p> Signup and view all the answers

Which of the following is NOT a basic element of organisation structure?

<p>Employee salary (A)</p> Signup and view all the answers

Match the following terms with their definitions:

<p>Authority = The right to make decisions and allocate resources Responsibility = Duty to complete assigned tasks Accountability = Being answerable for outcomes Delegation = Transferring authority to another person</p> Signup and view all the answers

Unity of command refers to the principle that each employee should report to multiple managers.

<p>False (B)</p> Signup and view all the answers

Name one negative result of work specialisation.

<p>Boredom</p> Signup and view all the answers

What describes the difference between authority and power?

<p>Authority is position-based, while power is the ability to influence decisions. (B)</p> Signup and view all the answers

Accountability can be delegated to other employees.

<p>False (B)</p> Signup and view all the answers

What is meant by 'span of control'?

<p>The number of subordinates directly reporting to a manager.</p> Signup and view all the answers

In a __________ organisation, decision-making is centralized at the top of the hierarchy.

<p>centralized</p> Signup and view all the answers

Match the following structure types with their characteristics:

<p>Mechanistic Structure = Rigid and stable, high in specialization Organic Structure = Flexible and adaptive, encourages cross-functional teamwork Centralized Organization = Decision-making at the highest levels Decentralized Organization = Decision-making pushed down to lower levels</p> Signup and view all the answers

Which statement about responsibility and accountability is true?

<p>Responsibility can be delegated, but accountability cannot. (B)</p> Signup and view all the answers

Mechanistic structures are typically best for complex, adaptable tasks.

<p>False (B)</p> Signup and view all the answers

Name one advantage of a decentralized organization.

<p>Decisions are made closer to where problems occur.</p> Signup and view all the answers

Flashcards

Formal Structure

The official structure of an organization, outlining how activities are divided, supervised, and coordinated.

Informal Structure

The unofficial, but often crucial, working relationships between members of an organization.

Work Specialization

The breakdown of a job into specific tasks, with each task assigned to a different individual.

Chain of Command

The continuous line of authority that extends from the top of an organization to the bottom, clarifying who reports to whom.

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Authority

The right of an individual in a specific role to make decisions, allocate resources, and give instructions.

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Responsibility

The obligation to perform assigned tasks and be accountable for the results.

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Accountability

The obligation to explain and justify one's actions and decisions.

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Delegation

The process of assigning tasks and authority to another person.

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Span of Control

The number of direct subordinates a manager is responsible for.

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Centralized organization

Decisions are made by a few people at the top of the organization.

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Decentralized organization

Decisions are made at lower levels, closer to the problem.

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Departmentalization

The practice of grouping similar activities into units, each led by a manager.

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Mechanistic structure

A structure with high specialization, centralization, and formalization.

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Organic structure

A structure with flexible rules, decentralized decision-making, and horizontal communication.

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Power

The capacity to influence decisions.

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Study Notes

Organisation Structure

  • The way work is divided, supervised, and coordinated within an organisation.
  • Organisation structure is often visualised using an organisation chart.
  • The chart shows departments, work positions and the reporting relationships between them.

Lecture Topics

  • Definition of organisational structure
  • Basic elements of organisational structure
  • Basic types of organisational structure

Types of Structure

  • Formal structure: The official structure of an organisation. It outlines how the organisation's activities are divided, supervised, and coordinated. This includes official guidelines, documents, and procedures.

  • Informal structure: The unofficial but often critical working relationships between organisational members. This shows who communicates and interacts regularly, regardless of formal titles and relationships.

Basic Elements of Structure

  • Work Specialisation: Breaking down a job into steps performed by separate individuals. This allows for specific skills to be used efficiently.
  • Chain of Command: The continuous authority flowing from the highest to the lowest levels. This clarifies reporting structures and lines of authority. Unity of command means an employee reports to only one manager.
  • Span of Control: The number of people directly reporting to a manager. The right span of control is needed for effective management.
  • Centralisation vs Decentralisation: Centralisation concentrates decision-making at the top of the organisation, whereas decentralisation pushes decision-making to lower levels, closer to the problem.
  • Departmentalisation: Structuring the organisation's activities into units. Managers oversee each unit.

Work Specialisation

  • Jobs are broken down into steps for individuals to complete.
  • Employees with different skills perform specific tasks.
  • Efficient use of various skills increases performance.
  • Drawbacks: Job boredom, difficulty replacing employees, and lower morale and productivity.

Chain of Command

  • A continuous flow of authority from top to bottom establishing the reporting structure within an organisation.
  • Early management writers stressed the concept of unity of command—an employee’s reporting to only one manager.
  • Related concepts: Authority, Responsibility, Accountability, Delegation.

Authority

  • The right that a person has in a specific role to make decisions, allocate resources, or give instructions. Authority comes from formal position, not the individual.
  • Resistance arises when managers exceed their formal authority.

Responsibility

  • An employee's duty to perform assigned activities and meet expectations.

Accountability

  • Employees with authority report on their work to those above them in the chain of command.

Delegation

  • Managers grant authority to subordinates for undertaking specific activities or decision-making.

Responsibility/Accountability/Delegation

  • Responsibility can be delegated, but accountability cannot.
  • Good managers credit others for successes and accept blame for failures related to delegation.

Authority vs Power

  • Authority is linked to a position's formal powers and is independent of the individual.
  • Power is the ability of an individual to influence decisions, regardless of their position.

Span of Control

  • The number of subordinates directly reporting to a manager.
  • The optimum span of control balances employee experience level and needed supervision.
  • Span of control influences the organisation's structure (tall/flat)
  • Direct supervision decreases with increasing employee experience and training.

Centralisation vs Decentralisation

  • Centralised organisations focus decision-making at the top.
  • Decentralisation devolves decision-making to lower levels.

Departmentalisation

  • Dividing organisational activities into distinct units.
  • Managers oversee each unit. (e.g., Functional departmentalisation).

Types of Structure

  • Mechanistic structure: Rigid and stable. Best for simple, repetitive tasks. Characterised by high specialisation and centralisation.
  • Organic structure: Flexible and highly adaptable. More successful with complex and unique tasks. Characterised by knowledge spread, limited rules and regulations, and horizontal communication.
  • Organisations often use a combination of both structures.

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