Business Studies – 2.2.1 Simple organisational structures | e-Consult
2.2.1 Simple organisational structures (1 questions)
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a) Type of Organizational Structure:
The organizational chart depicts a Functional Structure. Key characteristics of a functional structure include:
- Grouping by Function: Employees are grouped based on their specialized skills and functions (e.g., Engineering, Sales, Finance).
- Clear Chain of Command: A clear hierarchy exists, with authority flowing from top to bottom within each function.
- Specialization: Employees within each function develop expertise in their specific area.
- Centralized Decision-Making: Major decisions are typically made by senior managers within each function.
b) Advantages and Disadvantages:
Advantages:
- Efficiency: Specialization leads to increased efficiency within each function.
- Development of Expertise: Employees can develop deep expertise in their area of specialization.
- Clear Career Paths: Employees can progress within their functional area.
- Economies of Scale: Centralized functions can achieve economies of scale.
Disadvantages:
- Poor Communication: Communication between different functions can be slow and difficult.
- Siloed Thinking: Departments may focus on their own goals, neglecting the overall company objectives.
- Slow Decision-Making: Decisions often require approval from multiple levels of management.
- Limited Innovation: The focus on specialization can stifle innovation.