Chapter 18: Competitive Organisational Structure
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- Created on: 05-02-15 20:36
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- Competitive Organisational Structure
- organisational structure
- the relationship between different people and functions in an organisation- both vertically and horizontally between different functions and people at the same level
- Factors determining the choice of organisational structure
- size of the organisation
- nature of the organisation
- culture and attitudes of senior management
- skill and experience of its workforce
- dynamic, or ever-changing, external environment
- Accountability
- the extent to which a named individual is held responsible for the success or failure of a particular policy, project or piece of work
- can easily be seen in organisational chart
- Centralisation vs Decentralisation
- disadvantages of centralisation
- manager of local branch has greater knowledge about customers needs but has little input in decision making
- can adversely affect motivation of managers
- can lead to inflexibility and inappropriate decisions on a local level
- advantages of decentralisation
- empowers local managers
- local knowledge may have a beneficial effect on sales
- flexibility should improve
- could enhance motivation
- reduces volume of day-to-day communication between head office and local branches
- disadvantages of decentralisation
- customers may not like reduction in uniformity of branches
- by focusing on local issues, local managers may not see the big picture and therefore may miss an opportunity
- advantages of centralisation
- consistent policies on marketing and production
- decisions can be made quite quickly
- corporate views can be clearly emphasized
- every branch is identical, meaning customers know what to expect
- strong centralised leadership is useful in times of crisis
- the degree to which authority is delegated within the organisation
- disadvantages of centralisation
- Delayering
- the removal of one or more layers of hierarchy from the management structure of an organisation
- often done in order to cut cost by making people redundant
- however organisations may lose experienced managers and therefore corporate memory
- Outsourcing
- using sources outside a business to undertake functions that used to be done internally
- gives a firm the opportunity to use expertise not otherwise available in the organisation, to offload low-level admin, allowing employees to undertake interesting work and to reduce costs.
- Homeworking
- organisations can greatly reduce their costs if using homeworking as it removes employees need to travel and may motivate staff as it allows them to be independent and have responsibility
- Advantages of a flexible workforce
- able to respond more quickly to market conditions by expanding or contracting capacity
- able to cut down costs
- can make more use of specialists
- can make more efficient use of resources by directing them to strengths or p priorities
- Disadvantages of a flexible workforce
- organisations will be dependent on other organisations
- may be less opportunity for future expansion
- peripheral workforce may be less motivated than core workers
- in the short tem, firm may receive a negative image
- likely to require a culture change for the firm
- organisational structure
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