Chapter 5 Business organization, structure and strategy ACCA F1 Chapter 5 Business organization, structure and strategy

Organizational structure Mintzberg’s —— strategic apex, middle line, operating core, techno-structure and support staff. Some common structures: departmentation, divisionalization, matrix and project, simple structure, etc. Some new structures: like the shamrock organization（四叶草组织）

Departmental organization In most organizations, tasks and people are grouped together in some rational way —— departmentation There’re many basis - functional, geographic, product, brand, project, customer, etc.

Other organizational structures Divisional structures: involve decentralization, it divide a business into many divisions which have their own autonomous rights. (like Haier) Hybrid structures: involve a mix of functional departmentation, ensuring specialized attention to key functions. Entrepreneurial structure(the simple structure) involves centralization, the strategic apex retain control over decision-making.

Other organizational structures Matrix organization: crosses functional and product/customer/project organization. Shamrock organization: a core of essential executives and workers supported by outside contractors and part-time help. Including professional core, self-employed professionals, contingent work force, and customers. (Handy)

Key terms about organization Span of control: the number of subordinates responsible to a superior. Scalar chain: chain of command from the most senior to the most junior. When the span of control is narrow, the scalar chain is long- tall organization. When the span of control is wide, the scalar chain is short- flat organization Delayering: the reduction of the number of management levels from bottom to top. (扁平化)

Key terms about organization Centralization: referring to geography or authority, a centralized organization is one in which authority is concentrated in one place. Decentralization: authority is scattered. Centralization offers grater control and coordination. (like China) Decentralization offers greater flexibility. (like USA)

Organization’s strategy Corporate strategy: is in the most general level, it is concerned with what types of business the organization is in. Business strategy: focus on particular product market area. Functional/operational strategy: deals with special activity. There’re 3 level in Anthony hierarchy: strategic, tactical and operational management.

Informal organization Informal organization is an arrangement by-pass the formal one, it is loosely structured, flexible and spontaneous.(如早期的工会-labor union, your idea?) If the informal organization is well managed, it is beneficial to realize the goals of the organization; however, if it is not managed well, the informal organization may be detrimental. Informal organization has group norms

Informal vs. formal organization Social relationships and groupings VS. formal structures(e.g., department) Informal communication VS. formal reporting channels and routes Behavioral norms and ways of doing things VS. formal procedures and systems Power/influence structures(informal leader) VS. organizational authority