Chapter 5 Business organisation, structure and strategy

1. Chapter 5 Business organisation, structure and strategy Qiang Jiang School of Business Sichuan University, China jiang.qiang@outlook.com

2. Topic list 1 The informal organisation 2 Organisational structure 3 Levels of strategy in the organisation 4 Centralisation and decentralsation

3. 1 The informal organisation • Benefits of the informal organisation • Employee commitment • Knowledge sharing • Seed • Responsiveness • Co-operation

4. 1 The informal organisation • Problems of informal organisation: • Collectively against organisational interests • Moral-damaging rumours • Too important to fulfilling employees’ needs • Violating safety or quality assurance measures

5. 1 The informal organisation • Managers can minimize problems by: • Meeting employee’s needs as far as possible • Harnessing the dynamics of the informal organisation • Involving managers themselves in the informal structure

6. 2 Organisational structure • Components of the organisation • Strategic apex • Operating core • Middle line • Technostructure • Support staff

7. 2 Organisational structure • Functional departmentation • Advantages: • Expertise is pooled • Avoid duplication • Facilitates • Centralised • Disadvantages: • Communication problems • Poor co-ordination • Vertical barriers

8. 2 Organisational structure • Geographic department • Advantages: • Local decision-making • Cheaper • Disadvantages: • Duplication • Inconsistency

9. 2 Organisational structure • Product/brand departmentation • Advantages: • Accountability • Specialisation • Co-ordination • Disadvantages: • Increases the overhead costs • Fail to share resources

10. 2 Organisational structure • Customer departmentation • Sales department • Business customers • Divisionalisation • Properly delegated authority • Large enough • Management support • Potential for growth • Scope and challenge • ‘arm ‘s length’ transaction

11. 2 Organisational structure • Hybrid structures • The simple structure • A pull to centralise • The simple structure is characteristic of small, young organisations

12. 2 Organisational structure • Matrix and project organisation • Advantages： • Greater flexibility of people, workflow and decision-making, tasks and strucure • Inter-disciplinary co-operation • Motivation and employee development • Market awareness • Horizontal workflow

13. 2 Organisational structure • Matrix and project organisation • Disadvantages： • Dual authority • Conflicting demands or ambigurous roles • Cost • Slower decision making

14. 2 Organisational structure • The new organisation • Flat structures • Horizontal structures • Chunked and unglued structures • Output-focused structures • Jobless structures • Virtual organisations

15. 2 Organisational structure • The shamrock organisation • Professional core • Self-employed professionals • Contingent work force • Consumers • Three kinds of flexibility: • Personal costs • Personnel numbers • Skills

16. 2 Organisational structure • Span of control refers to the number of subordinates responsible to a superior • Capabilities • Nature of the manager’s workload • Geographical dispersional

17. 2 Organisational structure • Tall and flat organisations • Scalar chain • Delayering • Information technology • Empowerment • Economy • Fashion

18. 3 levels of strategy in the organisation • Corporate strategies • Scope of activities • Environment • Resources • Values • Timescale • Complexity

19. 3 levels of strategy in the organisation • Business strategy • Functional/operational strategies • Marketing • Production • Finance • Human resources management • Information systems • R&D

20. 3 levels of strategy in the organisation • Corporate strategies • Business strategy • Functional/operational strategies • The anthony hierarchy

21. 3 levels of strategy in the organisation • Corporate strategies • Business strategy • Functional/operational strategies • The anthony hierarchy

22. 3 levels of strategy in the organisation • The anthony hierarchy • Strategic management • Tactical management • Operational management

23. 4 Centralisation and decentralisation • Centralisation • Geography • Authority • Advantages an disadvantages of centralisation