Comprehensive Study Guide on Business Organisations, Structures, Culture, Information Systems, and Stakeholders

Business Organisations and Reasons for Formation

Organisations Overview

Definition of an Organisation:
- According to Buchanan and Huczynski, organisations are defined as: "Organisations are social arrangements for the controlled performance of collective goals."
- Key Aspects of Buchanan and Huczynski's Definition:
- Collective Goals: Organisations are defined by their stated goals. For instance, the primary goal of a school is to educate pupils, which dictates a completely different organizational structure compared to a commercial entity aiming to make profits.
- Social Arrangements: An individual working alone cannot be classified as an organisation. Organisations are structured arrangements that enable multiple people to collaborate towards shared objectives. Generally, larger organisations require more formal structures.
- Controlled Performance: Systems and procedures are maintained to ensure group goals are achieved. In a commercial company, control mechanisms include establishing sales targets and conducting periodic staff performance evaluations.
Core Operational Process:
- A fundamental feature common to almost all organisations is taking inputs and transforming them into outputs.
- Manufacturing Example: Raw materials are acquired and transformed into finished products to be sold to end customers.
- Accountancy Training Firm Example: Student intakes and educational syllabuses are processed and transformed into qualified accountants.
Case Study: A Football Team as an Organisation:
- A football team functions as an organisation based on the following criteria:
- Social Grouping: Multiple players come together to participate in the sport.
- Collective Objective: The goal is to score more goals than the opposing team.
- Internal Control System: Team members maintain systems of control during training and tactics planning to ensure coordinated passing and scoring plays.
- Organisational Structure & Task Specialisation: Every member fulfills a specialized role within a formal structure (e.g., a goalkeeper specializes in preventing goals, distinct from forward line attackers).
- Team Spirit & Cohesion: Shared values and group encouragement drive performance both on and off the field.
Why Organisations Are Needed (Benefits of Organisation):
- Sharing Skills and Knowledge: Allows individuals to accomplish complex tasks they could not execute alone and facilitates internal knowledge transfer.
- Specialisation: Workers focus on narrow, specialized activities, developing significantly higher expertise and skill levels compared to generalists.
- Pooling Resources: Enables the aggregation of physical, temporal, and financial resources.
- Synergy: By pooling talent and resources, organisations achieve an overall output greater than the sum of individual efforts ( $1+1>2$ ).
Practice Questions & Discussion:
- Question: Which of the following would be considered an organisation according to Buchanan and Huczynski's definition: (i) A sole trader, (ii) A tennis club, (iii) A hospital?
- Response: A tennis club and a hospital ((ii) and (iii) only). A sole trader lacks the required "social arrangement" of multiple individuals working together.
- Question: Daniel is organising a social event. What are the benefits of forming a committee? (i) Overcoming individual skill limitations, (ii) Saving time through joint effort, (iii) Satisfying social needs, (iv) Requiring all members to be skilled in all aspects.
- Response: Options (i), (ii), and (iii) are correct. Committee members do not need to be skilled in every aspect; specialisation allows individuals to focus on distinct areas.

Classification and Types of Organisations

Commercial (Profit-Seeking) versus Not-For-Profit Organisations:
- Commercial Organisations:
- Primary objective is the maximisation of owner/shareholder wealth.
- Sole Traders: Owned and managed by one individual. Lacks a separate legal identity from the owner. Liabilities belong directly to the individual (e.g., legal action against the business is a direct lawsuit against the owner).
- Partnerships: Owned and managed by two or more individuals. Traditionally lack a separate legal identity. However, modern structures such as Limited Liability Partnerships (LLPs) created in jurisdictions like the UK provide a separate legal entity with liability limited to the capital invested.
- Limited Liability Companies: Exist as separate legal entities from their owners (shareholders). Shareholders' liability is strictly limited to the amount invested.
  - Private Limited Companies (Ltd): Typically smaller, owned by a small group of shareholders. Shares cannot be offered to the general public.
  - Public Limited Companies (plc): Generally larger entities. Shares can be offered to the general public, facilitating large-scale capital accumulation for expansion.
- Not-For-Profit Organisations (NFPs / NPOs):
- Profitability is not the primary objective. Instead, NFPs seek to satisfy specific needs of their members or target societal sectors.
- Examples: Government departments (e.g., HM Revenue and Customs), state schools, public hospitals, charities (e.g., Red Cross, Oxfam, Doctors Without Borders), and social clubs.
- Varied NFP Objectives:
  - Hospitals focus on treating patients.
  - Municipal councils focus on caring for local communities.
  - Government bodies focus on executing public policy.
  - Disaster relief charities focus on delivering immediate aid to victims.
Public versus Private Sector Organisations:
- Public Sector: Controlled by government bodies to deliver essential public services (e.g., police forces, military, public transport, primary education, state healthcare for low-income citizens).
- Private Sector: Run by private individuals and private entities rather than the government (includes commercial businesses, private charities, and private social clubs).
Non-Governmental Organisations (NGOs):
- Organisations that do not operate for profit and are not directly linked to any national government.
- Focus on promoting political, social, or environmental changes across national boundaries.
- Key Examples: Red Cross, Doctors Without Borders, Greenpeace, Amnesty International.
Co-operatives:
- Owned and democratically controlled by member-customers who purchase their goods or services.
- Voting Structure: Operating on a "one member, one vote" democratic model, contrasting with commercial companies where voting power depends on the number of shares owned.
- Designed to meet member needs, with net profits redistributed among members.
- Example: The Co-operative Group in the UK has over $5.5\,\text{million}$ members operating across banking, travel, and retail grocery sectors.
Industry Sectors:
- Organisations operate across diverse economic sectors, including:
- Agriculture: Production, processing, and packaging of food items.
- Mining: Extraction and processing of mineral resources.
- Finance: Investment, commercial banking, and lending institutions.
- Retail: Selling manufactured physical goods directly to end consumers.
- Service: Production and delivery of intangible products and services.
- Transportation: Logistics and physical movement of goods across geographic regions.
Practice Questions & Discussion:
- Question: True or False? Many schools run fund-raising events such as fêtes where the intention is to make a profit. This makes them 'profit-seeking'.
- Response: False. Generating a surplus on fundraising activities does not reclassify an NFP school as a profit-seeking business; the surplus is reinvested into educational objectives.
- Question: What are usually seen as primary objectives of commercial companies? (i) Maximising shareholder wealth, (ii) Protecting the environment, (iii) Making a profit.
- Response: Options (i) and (iii) only.

Organisational Structure Types and Concepts

Organisational Structure Overview:
- Refers to how operational work is divided, allocated, and coordinated, detailing formal roles, authorities, and responsibilities.
- Evolves dynamically as businesses expand.
Structural Models:
- Entrepreneurial Structure:
- Formed around an owner-manager; characteristic of small, early-stage businesses where the entrepreneur possesses core technical knowledge.
- Advantages: Fast decision-making, high responsiveness to market shifts, strong goal congruence, direct executive oversight, close employee relationships.
- Disadvantages: Absence of formal career progression, total reliance on the entrepreneur's capabilities, inability to manage growth or product diversification.
- Functional / Departmental Structure:
- Groups employees performing similar technical duties into specialized departments (e.g., Marketing, Production, Finance, Personnel).
- Suitable for smaller businesses with limited product lines in stable environments.
- Advantages: Operational economies of scale, standardized outputs and procedures, specialist peer support, defined departmental career progression.
- Disadvantages: Risk of departmental "empire building," inter-departmental conflicts, slow decision-making due to long command chains, inability to accommodate product diversification.
- Divisional / Product Structure:

Divisional Organisational Structure

* Splits the entity into autonomous divisions managed by product, geography, or customer group. Each division operates as a Strategic Business Unit (SBU) or profit centre with its own functional sub-departments.
* **Illustration (A Ltd)**: A company manufacturing toasters and televisions maintains separate toaster and TV divisions with dedicated sales, purchasing, HR, and advertising units, while maintaining centralized finance oversight.
* **Advantages**: Facilitates corporate growth and diversification, establishes clear divisional accountability, develops general management talent, frees senior executives for strategic planning.
* **Disadvantages**: Potential loss of central executive control, goal congruence conflicts, operational duplication, specialist isolation, disputes over central cost allocations.

Geographically Structured:
- Divisions are organized by geographic territory (e.g., Asian, European, and American divisions).
- Comparison: Product divisional structures are preferred over geographic structures when products are complex and require capital-intensive equipment or highly skilled operators (e.g., automotive manufacturing).
Matrix Structure:

Matrix Organisational Structure

* Merges functional and divisional formats, requiring dual reporting. Employees report simultaneously to a functional head (e.g., Production Head) and a project/product manager (e.g., Manager for Product A).
* **Advantages**: Combines functional expertise with divisional focus, enhances organizational flexibility, improves customer alignment, fosters cross-disciplinary teamwork.
* **Disadvantages**: Ambiguous authority leading to command conflicts, dilution of functional oversight, excessive time spent in coordination meetings, higher administrative costs.

Boundaryless Structures:
- Hollow Organisations: Retain core strategic capabilities in-house while outsourcing non-core operational functions (e.g., an educational firm keeping training in-house while outsourcing payroll handling).
- Virtual Organisations: Exist as a central network of contracts, outsourcing almost all operational functions with minimal central staff.
- Modular Organisations: Break down physical manufacturing into discrete components, contracting third parties to produce specific modules (e.g., smartphone processors and displays) for final internal assembly.
- Structural Concepts:
Separation of Direction and Management: In large corporations, shareholders elect board directors to set strategic direction, while directors delegate operational execution to hired managers.
Scalar Chain: The uninterrupted line of authority extending from the highest executive down to the lowest operational tier.
Span of Control: The number of direct subordinates reporting to a manager.
- Influencing Factors: Work complexity (repetitive tasks allow wider spans), employee competence (skilled staff allow wider spans), and geographic proximity (colocated teams allow wider spans).
Tall versus Flat Organisations:

Tall versus Flat Organisational Structures

* **Tall Organisations**: Feature numerous management tiers (long scalar chain) and narrow spans of control. Characterized by high bureaucracy and slower decision-making.
* **Flat Organisations**: Feature few management tiers (short scalar chain) and wide spans of control. Characterized by rapid decision-making, weaker supervisory control, and reduced internal promotional opportunities.

Offshoring: Relocating business processes to foreign countries to lower operational costs (e.g., relocating UK call centers to India or the Philippines). Challenges include cultural nuances and communication barriers.
Shared Services Approach: Centralizes internal support functions (such as IT) into a single, standalone internal unit operating as an internal vendor that charges user departments. Improves service quality, consistency, and cost-efficiency.

Centralisation, Decentralisation, and Levels of Strategy

Centralisation versus Decentralisation:
- Centralised Structure: Decision-making authority is retained at the top executive hierarchy.
- Decentralised Structure: Decision-making authority is delegated down to lower management tiers.
- Determinants: Management leadership style, staff competence, organizational scale, and geographic distribution.
- Advantages of Decentralisation:
- Frees top management to concentrate on long-term corporate strategy.
- Improves local decisions by leveraging local market knowledge.
- Enhances employee motivation through career empowerment and development.
- Accelerates operational responsiveness due to shorter chains of command.
- Disadvantages of Decentralisation:
- Potential loss of central executive control.
- Dysfunctional decision-making caused by lack of goal congruence.
- Risk of costly mistakes made by inexperienced junior managers.
- Increased training expenditures and operational role duplication.
- Additional costs incurred in gathering decentralized management information.
Levels of Strategy (Anthony's Triangle / Hierarchy):

Anthony's Hierarchy of Strategic Planning

Strategic Planning: Executive level; long-term strategic decisions impacting the entire organisation (e.g., retail store site selection, capital investments).
Tactical Planning: Middle management level; medium-term planning for specific divisions or departments, detailing resource allocations (e.g., local store promotional offers, stocking policies).
Operational Planning: Supervisory level; short-term, detailed, day-to-day practical execution (e.g., employee work shift scheduling, stock replenishment).
Alignment Requirement: Successful execution requires absolute alignment across all strategy tiers. A strategic choice to elevate customer service must be backed by tactical budget allocations for hiring, which relies on operational recruitment processes.
- Practice Questions & Discussion:
Question: An electronics retail store is deciding how many inventory units to order next month to meet customer demand. Which strategy level does this represent?
- Response: Operational planning, as it concerns short-term, detailed inventory logistics.

Functional Departments and Marketing Management

Core Functional Departments:
- Research and Development (R&D): Focuses on improving existing products and innovating new product concepts. Key concerns: anticipating customer requirements, testing, cost containment.
- Purchasing: Acquires goods and services necessary for operations. Key concerns: unit prices, payment terms, quality standards, delivery schedules.
- Production: Converts raw input materials into finished goods. Key concerns: material quality, waste reduction, throughput schedules.
- Service Operations: Delivers client services (e.g., public accounting). Key concerns: service standards, time utilization, scheduling.
- Marketing: Identifies, anticipates, and fulfills customer needs. Key concerns: market research, product alignment, promotional mix, distribution channels, pricing strategy.
- Distribution: Handles product logistics to points of sale. Key concerns: delivery efficiency, stock control.
- Administration: Provides processing support. Key concerns: system efficiency, workflow accuracy.
- Finance: Handles accounting records, statutory reporting, tax compliance, budgeting, and capital raising. Key concerns: record accuracy, financial controls, management reporting.
Marketing Principles:
- Chartered Institute of Marketing Definition: "Marketing is the management process that identifies, anticipates and supplies customer needs efficiently and profitably."
- Marketing Orientation versus Product Orientation:
- Marketing Orientation: Customer-centric approach that aligns organizational capabilities directly with consumer desires.
- Product Orientation: Quality-focused approach driven by technical engineering. Dangers include escalating production costs beyond market tolerance and adding unvalued features.
The Marketing Mix (4Ps and Extended 7Ps):

Three Levels of Product Definition

Product: Features, design, branding, packaging, warranty, after-sales service.
- Three Product Levels:
  1. Core/Generic Product: The underlying benefit or utility purchased (e.g., basic personal transportation).
  2. Actual Product: The physical design features, engine choices, and styling.
  3. Augmented Product: Added value services including extended warranties, maintenance contracts, and credit terms.
Price: Base price, volume discounts, credit terms. Influenced by the 4Cs: Cost, Customers, Competition, Corporate objectives.
- Tactical Pricing Strategies: Cost-plus pricing, penetration pricing (low initial price to capture market share), perceived quality pricing (high price to signal luxury), price discrimination (e.g., peak vs off-peak rail fares), going-rate pricing, price skimming (high launch price gradually lowered), loss leaders, and captive product pricing.
Place: Geographic channels, retail outlets, vertical integration strategies.
Promotion: Moving customers through the AIDA model (Awareness $\rightarrow$ Interest $\rightarrow$ Desire $\rightarrow$ Action) using advertising, sales promotions, personal selling, and public relations.
Extended Service Mix (3Ps): People (staff competence), Processes (service delivery systems), and Physical Evidence (testimonials, environment).
- Market Research Approaches:
Desk Research: Secondary data analysis (e.g., government census statistics, trade association trends, internal sales ledger histories).
Field Research: Primary data collection via surveys and sampling.
Test Marketing: Controlled regional rollouts to refine marketing variables prior to full-scale release.

Organisational Culture and Informal Networks

Corporate Culture Defined:
- Hill & Jones: "The specific collection of values and norms that are shared by people and groups in an organisation and that control the way they interact with each other and with stakeholders outside the organisation."
- Handy: "The way we do things around here."
- Cultural Components: Norms of behaviour (e.g., informal dress policies), Symbols and symbolic actions (e.g., workplace rituals), and Shared values and beliefs.
- Cultural Determinants: Size, Technology, Diversity, Age, Organizational History, and Ownership structures.
Theoretical Frameworks:
- Edgar Schein's Three Tiers of Culture:
1. Artefacts: Visible organizational structures, dress codes, and layouts.
2. Espoused Values: Expressed strategies, corporate goals, and slogans.
3. Basic Assumptions and Values: Unconscious, taken-for-granted underlying beliefs guiding action.
- Charles Handy's Cultural Typologies:
- Power Culture (Zeus): Centralized power centered around a key individual; common in small entrepreneurial firms.
- Role Culture (Apollo): Bureaucratic structure governed by strict procedures and job descriptions; effective in stable environments.
- Task Culture (Athena): Focused on project completion; dynamic and result-driven.
- Person Culture (Dionysus): Serves individual professional needs (e.g., barristers' chambers).
- Geert Hofstede's Cultural Dimensions:
- Individualism versus Collectivism: Individual self-reliance versus group cohesion.
- Uncertainty Avoidance (UA) Index: Tolerance for ambiguity and risk. High UA cultures rely on formal rules and bureaucracy to reduce risk.
- Power Distance (PD) Index: Acceptance of hierarchical power distribution.
- Masculinity versus Femininity: Material success focus versus quality of life and balance focus.
- Long-Term versus Short-Term Orientation: Future perseverance focus versus past/present traditional focus.
- Indulgence versus Restraint: Gratification freedom versus societal rule regulation.
The Informal Organisation:
- Natural network of personal relationships and communication channels that develops alongside formal corporate structures.
- Advantages: Boosts employee morale, improves cross-divisional information exchange, reinforces positive social norms.
- Disadvantages: Can impede structural changes, spread false rumors ("grapevine effect"), and encourage group conformity that suppresses high performers.

Information Technology, Data, and Information Systems

Data versus Information:
- Data: Raw, unprocessed symbols, facts, numbers, and transactions.
- Information: Processed data structured to convey meaning for operational and strategic decisions.
- Data Classifications:
- Quantitative Data: Numerically measurable (e.g., labor hours per unit).
- Qualitative Data: Non-numerical descriptive attributes (e.g., worker skill tier).
- Discrete Data: Fixed specific values (e.g., $35\,\text{cars}$ washed, not $35.3$ ).
- Continuous Data: Any numeric value within a continuum (e.g., $4.375\,\text{cars/hour}$ ).
- Primary Data: Gathered specifically for the current investigation.
- Secondary Data: Repurposed pre-existing data.
Attributes of Good Information (ACCURATE):
- A - Accurate: Sufficient precision for intended use.
- C - Complete: Contains all critical facts.
- C - Cost-beneficial: Cost does not exceed derived business value.
- U - Understandable: Clear and user-friendly.
- R - Relevant: Highlights essential facts while omitting noise.
- A - Adaptable: Tailored to target user needs.
- T - Timely: Available when needed.
- E - Easy to use: Communicated through appropriate channels.
Information Systems Architecture:
- Information Technology (IT): Hardware infrastructure (e.g., servers, desktops, laptops).
- Information Systems (IS): Software and organizational processes designed to collect, process, and distribute data.
- Hierarchical Information Alignment:

System Types:
- Transaction Processing System (TPS): Processes daily operational transactions (e.g., sales checkout records, purchase order receipts).
- Management Information System (MIS): Converts TPS inputs into structured performance reports for tactical middle managers.
- Decision Support System (DSS): Combines internal TPS records with external market models to support semi-structured decision-making.
- Executive Information System (EIS): Executive dashboard presenting high-level summaries of internal metrics and external trends.
- Expert System (ES): Database containing domain specialist rules allowing non-experts to make complex evaluations (e.g., personal tax liabilities, legal conveyancing, medical diagnosis).

Software Applications, Cloud Computing, and Artificial Intelligence

Business Software Applications:
- Spreadsheets: Ideal for numerical analysis, financial modeling, and basic list management. Easy to use, but susceptible to data copy errors, missing file locks, and weak query controls.
- Databases: Designed to store large volumes of raw, relational data. Provides strong data security, eliminates redundancy, and handles concurrent multi-user access, though requiring higher setup costs and technical training.
- Accountancy Packages: Automated transaction ledgers generating real-time financial statements and management reports.
Cloud Computing:
- Delivers computing resources, software, and storage over the internet, replacing local physical servers.
- Key Benefits: Scalability, remote accessibility, automatic software updates, disaster recovery, enhanced data backup security, reduced local infrastructure investment.
- Disadvantages: Ongoing subscription contracts, third-party vendor dependency, potential staff reductions.
Artificial Intelligence (AI) and Machine Learning:
- AI Definition: Computer science focused on building intelligent systems capable of human-like cognitive tasks (e.g., speech recognition, autonomous decision-making).
- Machine Learning: Algorithms that process large datasets to detect hidden patterns, automatically adjusting models without explicit step-by-step programming.
- Accounting Applications: Automated ledger entry coding, fraud detection through anomaly spotting, revenue predictive modeling, automated extraction of key terms from unstructured legal contracts.

Big Data, Blockchain, and Cyber Security

Big Data Framework:
- High-volume, high-velocity, highly varied data assets requiring advanced analytical tools.
- The 4Vs:
1. Volume: Extreme scale of data collected (e.g., Match.com managing $70\,\text{terabytes}$ of customer records; modern hybrid cars generating $25\,\text{GB/hr}$ of operational sensor data).
2. Variety: Diverse formats (e.g., GPS coordinates, web logs, video feeds, social media activity).
3. Velocity: High-speed real-time processing requirements.
4. Veracity: Ensuring data accuracy and truthfulness.
- Practical Case Study (UPS): Equipping delivery vehicles with telemetry sensors optimized routing and driving patterns, eliminating over $15\,\text{million}\,\text{minutes}$ of engine idling ( $103,000\,\text{gallons}$ of fuel saved) and $1.7\,\text{million}\,\text{miles}$ driven ( $183,000\,\text{gallons}$ of fuel saved) in a single year.
Blockchain Technology:
- A decentralized, distributed public ledger that permanently records network transactions across peer-to-peer computer networks.
- Mechanics: Transactions are validated by automated computer consensus. Confirmed blocks are linked sequentially via cryptographic hashes, making historical data tamper-proof.
- Cryptocurrency Application (Bitcoin): Operating on peer-to-peer networks using password-encrypted digital wallets. Offers rapid international settlements with nominal transaction fees (typically $\$0.01$ per transaction).
- Accounting Benefits: Provides unalterable audit trails, eliminates ledger reconciliation costs, guarantees asset ownership verification.
Cyber Security:
- The protection of hardware, software, and electronic data from unauthorized access or malicious attacks.
- Common Threat Vectors:
- Malware: Malicious software (viruses, worms, trojans) designed to corrupt systems or grant remote backdoor control.
- Phishing: Fraudulent communications impersonating legitimate organizations to steal user credentials.
- Denial of Service (DoS): Flooding servers with traffic overload to disrupt legitimate service access.
- Man-in-the-Middle (MitM): Intercepting active communication exchanges to steal sensitive data.
- Major Breach Example (Marriott International / Starwood): A database breach spanning 2014 to 2018 compromised records of up to $500\,\text{million}$ guests, exposing personal details, passport numbers, and reservation itineraries.
- Security Mitigations: Regular off-site backups, firewalls, password security policies, data encryption, physical access safeguards, and continuous employee training.

Stakeholder Categories, Conflicts, and Mendelow's Matrix

Defining Stakeholders:
- Any individual or group affected by, or capable of influencing, an organisation's operations and decisions.
Stakeholder Classifications:
- Internal Stakeholders: Tightly bound inside the entity.
- Employees: Seek fair wages, good working conditions, job security.
- Managers / Directors: Seek career status, higher compensation, bonuses, business growth.
- Connected Stakeholders: Direct contractual or financial relationships.
- Shareholders: Seek steady dividend returns, capital growth, business continuity.
- Customers: Seek product quality, service reliability, value-for-money.
- Suppliers: Seek prompt invoice payments, steady commercial orders.
- Finance Providers: Seek loan repayments, interest fulfillment, capital security.
- External Stakeholders: Indirectly linked but impacted by operations.
- Local Community: Concerned with environmental impact, traffic, local employment.
- Environmental Pressure Groups: Seek sustainability and pollution avoidance.
- Government: Focuses on tax compliance, employment laws, safety regulations.
- Trade Unions: Seek member protection and fair labor representation.
- Primary versus Secondary Categorization:
- Primary Stakeholders: Hold explicit legal contracts (Internal and Connected stakeholders).
- Secondary Stakeholders: Lack formal contractual ties (External stakeholders).
Stakeholder Conflicts:
- Common structural trade-offs include:
- Employees vs Managers: Requests for wage increases versus executive cost-efficiency targets.
- Customers vs Shareholders: Lower product prices and enhanced features versus higher profit margins and dividends.
- General Public vs Shareholders: Expensive environmental protection installations versus short-term corporate profits.
- Managers vs Shareholders: Expanding managerial empires versus preserving owner capital and corporate independence.
Mendelow's Power-Interest Matrix:
- Positions stakeholders based on their power to direct the organisation and their level of interest in specific decisions:
- Low Power, Low Interest: Minimal Effort required.
- Low Power, High Interest: Keep Informed (can coalesce into powerful political groups if ignored).
- High Power, Low Interest: Keep Satisfied.
- High Power, High Interest: Key Players (must be actively involved in strategic decision-making).
- Sources of Stakeholder Power: Organizational hierarchy, direct personal leadership influence, control over scarce environmental resources, and management of business uncertainty.