Organisational structure and Management principles

Business

What do organisational structures show?

How groups of people work together and who reports to whom

What are the two main aspects used to describe organisational structures?

Levels of hierarchy and span of control

What is the effect of having more levels of hierarchy in an organisation?

More bureaucracy, leading to longer decision-making processes due to more checks.

What is meant by ‘span of control’?

The number of direct reports an individual has

What characterizes a flat organisation?

Wide span of control and decentralized decision-making, allowing for quick communication. Faster decision making, increasing flexibility

What are disadvantages for flat structure?

Heavy load on managers due to a wide span of control, potential for role confusion, and limited traditional career advancement opportunities for employees. 

What are the advantages of a tall organisation structure?

Narrow span of control, centralized decision-making. Provides clear lines of authority enables easier performance evaluation

What are disadvantages of tall structure

slow communication and decision-making due to many layers of management, which can also lead to higher operational costs

What is a matrix structure in an organisation?

A structure where teams report to two managers, often used for projects and cross-departmental teams

What is the shamrock structure?

A structure where only essential staff are employed and everything else is contracted out

What is outsourcing?

Hiring another business to complete a job that requires expertise not needed on a day-to-day basis

What are the three methods of organising within a business?

Geographical, functional, and divisional

What is the transformation process in production?

The process that converts inputs into outputs

What are the types of inputs in the production process?

Capital, natural resources, and enterprise

What are the characteristics of services?

Intangible, inseparable, perishable , and simultaneous production and consumption

What is a job production method?

Producing each product from start to finish. such as in haircuts or architecture

What are the advantages of job production?

Low overheads, skilled workers, and high customisability

What are the disadvantages of job production?

Labor intensive, high costs of labor and long lead times

What is batch production?

Completing a batch of products in certain stages or bases on seasonable demand.

What are the advantages of batch production?

Customizable and lower cost than job production with greater output rates.

What are the disadvantages of batch production?

Requires planning to be efficient, has inefficient wait times, and one mistake can affect many products.

What is flow production?

A continuous flow of products from a factory, such as biscuits or fast fashion items

What are the advantages of flow production?

High output efficiency and low per-unit cost.

What are the disadvantages of flow production?

Expensive to set up, breakage in flow can lead to waste, and requires high customer demand.

What is the difference between productivity and efficiency in a business?

Efficiency maximizes production at minimum costs, while productivity is a measure of that efficiency

What are the ways to measure productivity?

Output per worker or hour of labor, output per hour, day or week, output per machine, and unit costs (total cost divided by total output)

Why is high productivity important for a business?

It allows a business to produce goods at a lower cost than competitors, enabling either higher profit per unit sold or the ability to offer lower prices to customers

What are some methods to improve productivity?

Training employees, increasing motivation, installing better equipment, purchasing higher quality raw materials, and better organization of production

What is lean production?

Maximising units produced while minimizing inputs and waste, using the TIMWOOD method to identify seven areas of waste

What is productive capacity?

The number of units that can be produced by a given number of inputs

What are two types of capacity issues?

Under-utilisation of plant, which results in lose opportunities and over-utilization of plant, which leads to stress in people and machines

What are economies of scale?

Productivity gains achieved by increasing production, resulting in lower per-unit fixed costs

What are the three levels of management?

Senior (CEO and CFO) Middle (Department heads) Frontline (Team leaders, supervisors)

What are the four functions of managers?

Planning, organizing, controlling, and contributing to corporate objectives.

What is the focus of senior managers?

To focus on planning

What is the focus of middle managers?

To focus on organizing

What is the focus of frontline managers?

To focus on controlling

What is the authoritarian management style?

A style where the manager makes decisions based on their objectives, dictates actions, sets goals, and closely supervises employees

What is the democratic management style?

A style where managers encourage employee input in decision making, requiring good communication.

What is the laissez-faire management style

A hands-off approach where managers rarely interfere in day-to-day activities , suitable for highly skilled workers

What is the role of leadership in a business?

Leadership sets the tone for the organizational culture and decision making, requiring a vision that others believe in and follow.

How do managers and leaders influence others?

Through their contractual authority, while leaders influence through actions, attitudes, and charisma

Why are managers and leaders important in organization?

They influence others to act in the best interest of the business

What are the two main types of financial decision making?

Financial records and budgets/projections

What is revenue in a business context?

Money paid to the business as a result of trading

What are expenses in relation to a business?

Costs of running the business

Define assets in a business

Tangible or intangible items controlled by the company

What are liabilities?

Money owed to other businesses

What is equity in a business context?

Capital invested by owners

How can financial reports be used in decision making?

Businesses can analyze reports, share them with relevant parties, and make decisions based on the results

What is the purpose of budgets in a business?

Budgets contain predicted figures and are tools for goal setting and strategic planning

What is variance analysis?

The difference between projected and actual figures, expressed as a percentage used to investigate budgets and financial accounts

What are policies in a business context?

Business wide guidelines on how decisions should be made, defining expectations and rules

What are procedures in a business?

Business wide methods for carrying out day to day activities 

What is the difference between programmed and unprogrammed decisions?

Programmed decisions are made quickly with a pre defined outcome, while unprogrammed decisions have outcomes that are not obvious at first

List some benefits of having policies in a business?

Consistency in treatment of employees, clear staff expectations, and increased transparency

What are the benefits of having procedures in a business?

Protection of health and safety, minimal waste due to reduced mistakes, and consistent quality standards

What is corporate social responsibility (CSR)?

Operating in ways that enhance rather than worsen society and the environment 

What are the four categories of CSR?

Environmental impacts, ethical responisilibtiy philanthropic endeavors, and financial responsibilities 

What should a business do to understand its CSR impact?

Identify stakeholders. assess their needs and values, and evaluate positive and negative impacts

What are some potential benefits of CSR for a business?

Brand awareness, publicity, and improved staff morale

What is a key consideration when implementing CSR initiatives?

The costs may be high, but the benefits can outweigh them