Chapter 2 – Management Structures and Corporate Culture

The 6 Management Structures are…
• Simple Structure
• Geographic Structure
• Functional Structure
• Divisional Structure
• Matrix Structure
• Organic Structure
Simple Structure:
Draw It, Define It, Name 3 Positives, 2 Negatives, Who It Best Suits
A Simple Structure is the most basic layout of an organisation, with only two layers or levels.

• Simplicity
• Owners/Managers are in Close Contact with Employees
• No Communication Barriers

• Managers Need A Wide Level of Knowledge In All Areas
• No Career Path for Employees Except For The Top Job

Best suits a small or micro business that has few employees

Geographic Structure:
Draw It, Define It, Name 4 Positives, 3 Negatives, Who It Best Suits
A Geographic Structure is for companies that operate different branches in multiple locations

• LSO Can Access Wider Markets
• Local Issues/Laws Can Be Handled Easier
• Employees Have Opportunities to Move to Other Locations
• “Follow the Sun” Method, Whereby Work Can Be Sent Around the World So It Is Worked On For More Hours

• Language Barrier between Countries
• Time Can Be Wasted When Managers Move From Branch To Branch
• Control Can Be Lost If Senior Managers Aren’t In Every Place At Every Time.

Best suits multinationals and larger organisations.

Functional Structure:
Draw It, Define It, Name 3 Positives, 1 Negative
Who It Best Suits
A Functional Structure is a way Of organising an Organisation into sections that are defined by the functions performed.

• A Specialist In Charge Of Each Area. This Should Ensure High Productivity And Best Ideas.
• Workers Have a Manager in Their Own Area
•Some LSO’s Allow Sideways Career Paths So That Employees Can Gain Experience in All Areas

• Functional Managers Need To Talk To Eachother; There Is No Use Employing People If There Is Now Money to Pay Their Wages

Best Suits Small Medium-To-Large Organisations

Divisional Structure:
Draw It, Define It, Name 2 Positives, 1 Negatives, Who It Best Suits
A Divisional Structure has the same foundation as the functional structure, except that it is divided into smaller sub-groups for each functional area, with a manager in charge of each.

•A Specialist in Each Area, Allowing For Best Practice in These Areas
•Room for Career Advancement

•If Communication Channels Aren’t Clear, It Can Be Difficult To Work Out Whom To Talk To.

Best Suits Very Large Organisations

Matrix Structure:
Draw It, Define It, Name 2 Positives, 2 Negatives, Who It Best Suits
Matrix Structures occur when companies have multiple projects on at the one time. This way, managers are able to oversee multiple projects at the same time.

•Control Is Decentralised, Ensuring Better Monitoring Of All Aspects
•Opportunities for Horizontal or Vertical Career Direction

•Communication Can Become Difficult Between Projects and Senior Management
•Staffing Issues When One Project Finishes and There Is No Work for Employees

Best Suits Companies That Have Multiple Projects at the Same Time

Organic Structure:
Draw It, Define It, Name 2 Positives, 2 Negatives, Who It Best Suits
An Organic Structure has its core business maintained by employees, and non-core functions are outsourced

•Money Is Not Wasted On Employing People All Year Round, Only Being Outsourced When Needed.
•Outsourced Companies Will Provide The Best Service, And Should Be Correct And Legal.

•Outsourced Companies May Not Take Into Account The Core Business’ Mission And Value Statements.
•Control Can Be Lost If Other Companies Are Completing The Work.

Best Suits Medium to Large Companies That Don’t Want To Stray Too Far From Their Primary Purpose as stated in the Mission

Management Structures Outline…
The way an LSO is organised in terms of its Management Hierarchy
The 3 Reasons Why Management Structures Are Important To Stakeholders Are…
•The Way That Communication Flows Within an Organisation
•The Possibility of Career Paths
•The Hierarchy of Positions within the Organisation
Corporate Culture is…
The shared values or beliefs of the people within an organisation. It is the unwritten rules and is expressed in attitudes and performances of employees.
Official Culture is…
The set of values and beliefs an organisation wishes to present to the public. It is stated in the company motto or mission statement.
Real Culture is…
The set of values and beliefs actually prevailing within an organisation. It is best identified by observing the relationships among the people in the organisation.
5 Indicators of Corporate Culture are…
•Communication Channels – Is it formal or informal?
•Dress Code – Is it normal, casual, uniform?
•The Willingness To Achieve – Trying hard for your business or slack and relaxed?
•Socialisation – Do the Staff Mingle? Are they friends outside of work?
•Layout – Closed Off Areas or Open Plan?
5 Causes Of Change to Corporate Culture…
•New Managers
•New Employees
•Macro Factors
3 Reasons Why Corporate Culture is Important to an LSO are…
•Better Retention Levels (Lower Staff Turnover Rate)
•Become Attractive To New Employees
•Better Productivity Levels = More Success for The LSO
Best Practice is…
A method of comparing the performance of one organisation against the leading firms and taking on board their practices.
Bureaucratic Structures are…
Structures in which there are many levels of management and a clear vertical hierachy.
Downsizing is…
The organisation becoming smaller in some way; perhaps by eliminating non-profitable areas of operation, or simply by reducing the number of employees.
Rightsizing is…
Similar to downsizing. The main difference however, is that it may sometimes involve actually making the business bigger. Usually it involves the business eliminating the non-core areas of it’s operations, and concentrating on the areas that it does best.
Outsourcing is…
Hiring another business or consultant to complete a task or process
Flat Organisational Structures have…
Few middle management positions; there are not many levels between the employees and senior managers.
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