Applied Business Exam

Organisational Structures: Organisation Structure
The relationship between different people and functions (departments) in an organisational
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Organisational Structures: Organisational Hierarchy
The vertical division of authority and accountability in an organisation.
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Organisational Structures: Levels of Hierarchy
The number of different supervisory and management levels between the ‘shop floor’ and the chief executive in an organisation.
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Organisational Structures: Span of Control
: The number of subordinates whom a manager is required to supervise directly.
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Organisational Structures: Delayering
Removing layers of hierarchy to flatten the organisational structure
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Organisational Structures: Benefits of Tall Structures
Promotional opportunities in regard to tall organisational structures (TOS). Another benefit is that there is low delegation leading to less stress. A third advantage would be that with TOS they are able to keep tight control on staff.
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Organisational Structures: Disadvantages of Tall Structures
Slower Communication. More staff to pay so higher overheads. The low delegation leads to low morale in staff. Messages can be lost or changed slightly when travelling through the hierarchy.
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Organisational Structures: Benefits of Flat Structures
Increased delegation in FS gives staff responsibility which helps them achieve potential. Communication through the layers is easier as there are less layers to communicate through. Communication is also clearer. There are also reduced staff costs.
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Organisational Structures: Centralisation and Decentralisation
The degree to which authority is delegrated within an organisation.
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Organisational Structures: Centralised Structure
A centralised structure has a greater degree of central (head office) control.
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Organisational Structures: Decentralised Structure
A decentralised structure involves a greater degree of delegrated control to lower regions of the business.
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Organisational Structures: Centralised Structure Advantages
Consistent Policies. Quicker decisions with no local consultation. Every branch is identical. Allows strong financial control. Strong leadership is good in a crisis as they can quickly make effective decisions.
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Organisational Structures: Centralised Structure Disadvantages
Local Manager may understand local customers better. Poor motivation in managers. Inflexible and poor decisions may be made at local level.
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Organisational Structures: Decentralised Structure Advantages
Empower Local managers. Local knowledge can lead to more effective local decisions. Reduces the amount of communication between head office and local branches which helps saves time. Senior Managers can focus on strategy. Improved motivation.
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Organisational Structures: Decentralised Structure Disadvantages
Customers may not like the variation between branches. Local managers may miss national trends.
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Organisational Structures: Functional Organistional Structure
The traditional management structure consisting of a different department for each of the main functions of the business (e.g. marketing, production, finance, human resources).
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Organisational Structures: Matrix Structure
Flexible organisational structure in which tasks are managed in a way that cuts across traditional departmental boundaries.Used alongside a traditional functional structure, not instead of it. Employees are answerable to both the team leader & DM
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Organisational Structures: Matrix Structure Advantages
Ensures projects are better cordinated. Gives individuals in different departments a chance to use their abilities and share knowledge. Better motivation
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Organisational Structures: Matrix Structure Disadvantages
Each Team member can end up with two leaders: the department boss and the project leader. Little Co-ordination between two leaders. Lines of accountability may be unclear.
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Functions of Management: Roles and Responiblities
The roles and responsibilities of management include: Planning, Organising, monitoring and evaluating, reporting on outcomes.
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Functions of Management: Management Skills
The managements skills are: Technical, communication, organisational, interpersonal.
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Critical Path Analysis: What is it?
Critical Path Analysis (CPA) is the process of planning the sequence of activities in a project in order to discover the most cost efficient and quickest way of completing it.
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Decision Trees: Definition of DT
A decision tree is a decision support tool that uses a tree-like graph or model of decisions and their possible consequences, including chance event outcomes, resource costs, and utility.
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Decision Trees: Advantages
Enable a business to quantify decision making. Useful when the outcomes are uncertain. Places a numerical value on likely or potential outcomes. Allows comparison of different possible decisions to be made.
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Decision Trees: Disadvantages
How accurate is the data used in the construction of the tree? How reliable are the estimates of the probabilities? Data may be historical – does this data relate to real time? Necessity of factoring in the qualitative factors – human resources etc.
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Types of Decisions: Routine
Routine decisions are ones that are taken regularly.
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Types of Decisions: Non-Routine
Non-routine decisions occur irregularly and are taken by managers at all levels of an organisation.
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Types of Decisions: Tactical
Tactical decisions are based on short-term factors.
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Types of Decisions: Strategic
Strategic decisions are those that have long-term implications, often for the whole business.
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Types of Decisions: Proactive
A proactive decision is one taken in advance of events.
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Types of Decisions: Reactive
Reactive decisions are taken when businesses respond to events rather than trying to shape them.
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Power: Definition
Power exists when one person can get another person to do something that they otherwise would not want to do. This can be through the use of reward or punishment.
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Authority: Definition
Authority is a special form of power in the sense that it gives people the right to give commands which others accept as legitimate as they feel a duty to obey due to the person’s position/status.
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Types of Authority: Traditional Authority
Whereby the people have allowed rulers – such as hereditary monarchs or business heirs – to exercise power over a long period of time, thus implying they consent to such rule.
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Types of Authority: Charismatic Authority
Whereby the authority is granted by acclaim because the people wish to be governed by a particular leader.
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Types of Authority: Legal-Rational Authority
This is in modern democracies, this is always by election to ensure a fair competition
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Authority: Lack of Authority
Subordinates may question leaders decisions and spend long periods arguing about instructions. Subordinates may waste time criticising their manager rather than carrying out their duties. Junior employees may ignore managers decisions and take acti
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Sources of Power: Coercive Power
Coercion- the strongest form of power-is based on the subordinate’s fear of the leader. This is commonly maintained through the use of threats and punishment.
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Sources of Power: Reward Power
The ability to provide rewards for followers gives leaders a form of power. Subordinates comply with managers requests because they expect to benefit through improved pay, promotion or recognition as a consequence.
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Sources of Power: Expert Power
Possession of a particular expertise, skills, or knowledge can give power. Subordinates are likely to recognise the leaders expertise and be willing to follow suggestions.
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Sources of Power: Legitimate Power
Legitimate power derives from a person’s position or job in an organisation. Legitimate power increases as you go up the hierarchy. It gives people power because of their roles, rather than their skills and talents.
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Sources of Power: Referent Power
Referent power derives from a leader’s charisma. People are more likely to follow the lead of someone they like and admire. Many employees seek their approval and hold them as role models.
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Difference between Managers and Leaders
Leaders look to the future; managers focus on the present, leaders are willing to break the mould; managers are likely to maintain status quo, leaders have vision; managers are implementers,
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Styles of Leadership: Authoritarian (Autocratic) leadership
Communication tends to be one-way and top-down. The leader holds all the power.
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Styles of Leadership: Paternalistic Leadership
Broadly autocratic however employees are consulted and their views taken into account yet decision-making remains firmly at the top.
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Styles of Leadership: Laissez-faire Leadership
Abdicates responsibility and essentially takes a hands-off approach. The leader provides others with the proper tools and resources needed, and then backs off.
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Styles of Leadership: Democratic Leadership
Aims to make the employees feel that they are making the decisions. Individuals have power to make decisions (to an extent).
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Styles of Leadership: Participative Leadership
Leader invites input from employees on all company decisions. Staff are given pertinent information regarding company issues. A majority vote determines the course of action. Staff are fully involved in decision making.
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Motivation: Maslow's Hierarchy of Needs
Abraham Maslow said that there was an order in which needs had to be met before an employee could be fulfilled and fully motivated. Lower needs need to be satisfied before a higher need can motivate them.
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Motivation: Frederick Herzberg
Herzberg came up with a theory of motivators and hygiene factors, in order to motivate they need to meet the motivator factors & if HF are met they will led to workers not being demotivated.
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Motivation: Hygiene and Motivator Factors
HG factors are: under/over supervision, low pay, bad work relations, work conditions (e.g. heating etc). Motivator factors are: Sense of achievement, recognition of hard work, interesting work, responsibility, promotion opportunities.
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Motivation: McGregor's Theory X
Theory X Managers assume that workers: do not enjoy work and will avoid it, motivated by money, need to be supervised, have no desire for responsibility, are not interested in the needs of the organisation.
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Motivation: McGregor's Theory Y
Managers assume that workers: Enjoy work, will take responsibility if allowed to do so, boring work leads to lower productivity, poor management are also to blame for poor performance,workers have imagination and creativity to use in their work.
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Motivation: Financial Rewards
Bonuses. Commission – Usually provided to sales staff, where they are paid extra based on the number of sales they make. Profit sharing.
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Motivation: Non-Financial Rewards
Teamworking. Fringe benefits (e.g. money off products in store). Job rotation - Where an employee switches between tasks of a similar skill level to prevent boredom. Quality circles - Where employees form a group to focus on quality.
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Other cards in this set

Card 2

Front

The vertical division of authority and accountability in an organisation.

Back

Organisational Structures: Organisational Hierarchy

Card 3

Front

The number of different supervisory and management levels between the ‘shop floor’ and the chief executive in an organisation.

Back

Preview of the back of card 3

Card 4

Front

: The number of subordinates whom a manager is required to supervise directly.

Back

Preview of the back of card 4

Card 5

Front

Removing layers of hierarchy to flatten the organisational structure

Back

Preview of the back of card 5
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