Notesale: Turn your study into money

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CHAPTER 18: COMPETITIVE ORGANISATIONAL STRUCTURES
FACTORS DETERMINING THE CHOICE OF ORGANISATION STRUCTURE
-The size of the organisation: the larger the organisation, a more complex structure is likely
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- The skill and experience of its workforce
- the dynamic/ ever-changing external environment
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- When a firm’s management structure is clear, staff should know what authority has been given to
them and by whom
- According to Herzberg, achievement and recognition of achievement will produce motivation
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- This in turn may make them overcautious, to the detriment of the business
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CENTRALISATION V DECENTRALISATION
-On one hand, organisations desire stability, uniformity and centralised control
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- How these considerations are balanced influences whether an organisation has a centralised or
decentralised structure
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Advantages of centralisation
- Consistent policies on marketing and production mean greater control and standardisation of
procedures
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- Every branch of a retail business is identical, meaning that customers know exactly what to expect
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- The corporate view can be clearly emphasised
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Disadvantages of centralisation
- The manager of a local branch may have a far better knowledge about customers’ needs, but has
little input into the decision-making process
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- It can lead to inflexibility and inappropriate decisions at local level and may also lengthen the whole
decision-making process
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- Delegation should be backed up by financial resources
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Advantages of decentralisation
- Can empower local managers, encouraging them to be more innovative
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- Reduces day-to-day communication between head office and local branches
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- Flexibility should improve as the organisation becomes more responsive to changing customer
demands
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Disadvantages of decentralisation
- Customers may not like reduction in uniformity of branches
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FUNCTIONAL V MATRIX ORGANISATIONAL STRUCTURES
Functional organisational structure
- Could be adapted and used for businesses that organise themselves according to geographical
regions or product brands
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- Relatively inflexible structure
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- Employees involved in a project team will report to the team leader on issues linked to the project,
but will also be answerable to their department manager for their other roles
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- It gives people in different departments the opportunity to use their abilities and share their
knowledge
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- It may lead to greater motivation
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Disadvantages of a matrix organisational structure
- Each team member can end up with two bosses – their department manager and the project
leader
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- Lines of accountability may be unclear
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- Advantages and disadvantages are similar to those for a flat hierarchal structure with a wide span

of control
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- A real problem is that the organisation loses many of its very experienced managers and thus what
is sometimes called its ‘corporate memory’ i
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the memory of contacts, history and past events etc
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- Activities and responsibilities of core workers are central to the organisation and such workers are
likely to be fully committed to the aims and objectives of the organisation
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- Their jobs are less secure and they are less likely to be committed to the organisation’s aims and
objectives
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- He called this the ‘shamrock organisation’
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- They have the skills to move the company’s core capabilities forward
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The contractual fringe
-Made up of both individuals and organisations of self-employed professionals or technicians
...
g
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- They are rewarded with fees rather than wages or salaries
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- Management chooses not to add these people to its permanent payroll and benefits plan, thus
achieving a significant cost saving
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- These people are brought in from the outside to do individual, low level, temporary tasks
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- What Handy has identified is the scale of the phenomenon today
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- A portfolio career might consist of different working arrangements at different times
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- Having a self-managed portfolio career is a cumulative process and replaces the traditional idea
of promotion and progression within one organisation
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Outsourcing
- The most usual method of achieving a flexible workforce structure is by subcontracting work to
other firms
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- Areas of work that are commonly outsourced include: recruitment, training, and payroll activities
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Homeworking
- Advances in technology and the growing availability of broadband mean that many people can
work very effectively from home
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- This can motivate staff by giving them more independence and responsibility and, at the same
time, reducing the impact of Herzberg’s hygiene factors
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- The growing use of flexible workforce structures, and of homeworking in particular, has a
significant impact on management and on HR departments
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g
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- HR departments need to ensure that all policies are as robust for those employees who do not
work regularly in an office as they are for those who do
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- It can make more efficient use of resources by directing them to the organisation’s priorities or
strengths
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- It can make more use of specialists
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- Organisations will be dependent on other organisations and agencies outside their direct control
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In the longer term, the peripheral workforce may be less
motivated than the core workers

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