Entry 2 Organisational Structures

The importance of organisation structure.
The structure of every business organisation is varied based on factors such as who is in charge, what their role is and who to turn to when in need of advice.

Organisations are structured based on their size, culture, activities, history and objectives.

Google, on the surface adopts a tall hierarchy structure despite the use of the a standard corporate organisation, Google has developed a corporate culture based on giving employees based on giving employees substantial leeway to develop new ideas without excessive oversight.

So what does that make Google? They have managed to incorporate both tall and flat organisational structures into one which is unique to the way the company functions.

According to tibbr
(http://www.tibbr.com/blog/topics/enterprise-social-network-topics/why-are-leading-organizations-turning-to-a-flatter-organizational-hierarchy/?goback=.gde_3977473_member_99926731)

The author suggests that Google has indeed adopted a flat organisational structure.


A clear and concise video that I came across while doing my own research helped me recap what was being taught in Vishs' lecture and Robs' tutorials.

http://www.youtube.com/watch?v=R-m8grawp1k

We were taught the difference between a centralised and decentralised structure.
Organisations that adopt a centralised structure such as 'Burger Kings' tend to control and make all decisions at the very top of the hierarchy, this is to keep both product and services consistent throughout  their branches worldwide.

Global organisations such as 'Burger Kings', 'Pizza Hut' and 'MacDonalds' tend to adopt a centralised structure to protect their interest.

Here are some advantages and disadvantages of a centralised structure.

Advantages	Disadvantages
Easier to implement common policies and practices for the business as a whole	More bureaucratic – often extra layers in the hierarchy
Prevents other parts of the business from becoming too independent	Local or junior managers are likely to much closer to customer needs
Easier to co-ordinate and control from the centre – e.g. with budgets	Lack of authority down the hierarchy may reduce manager motivation
Economies of scale and overhead savings easier to achieve	Customer service does not benefit from flexibility and speed in local decision-making
Greater use of specialisation
Quicker decision-making (usually) – easier to show strong leadership

This table was taken from Jim Riley's article and it REINFORCES the points that I learnt in both lectures and tutorials.
Jim was a director at Thomson Travel Group Plc and a Corporate Finance and Strategy specialist at PwC. Jim is graduate Economist, a Fellow of the ICAEW and has a MBA (Distinction) from Bradford Management School.

A decentralised structure would often be found in organisations such as your supermarket chains; Tesco and Saintsburys. 

Each supermarket has a store manager who can make certain decisions concerning areas like staffing, sales promotions. The store manager is responsible to a regional or area manager. Hotel chains are particularly keen on using decentralised structures so that local hotel managers are empowered to make on-the-spot decisions to handle customer problems or complaints.

The advantages and disadvantages of a decentralised organisations are:

Advantages	Disadvantages
Decisions are made closer to the customer	Decision-making is not necessarily “strategic”
Better able to respond to local circumstances	More difficult to ensure consistent practices and policies (customers might prefer consistency from location to location)
Improved level of customer service	May be some diseconomies of scale – e.g. duplication of roles
Consistent with aiming for a flatter hierarchy	Who provides strong leadership when needed (e.g. in a crisis)?
Good way of training and developing junior management	Harder to achieve tight financial control – risk of cost-overruns
Should improve staff motivation

This table was taken from Jim Riley's article and it REINFORCES the points that I learnt in both lectures and tutorials.
Jim was a director at Thomson Travel Group Plc and a Corporate Finance and Strategy specialist at PwC. Jim is graduate Economist, a Fellow of the ICAEW and has a MBA (Distinction) from Bradford Management School.

Reading articles and cross-referencing them to my books and lecture/tutorial notes has since increased my knowledge and understanding on business studies(Management).

I find it useful whenever I come across sources that support the information that has been taught to me.