Summary: Managing Challenges

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• 1 Managing Challenges

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• What are the steps to build an organisation?

  1. Structuring of the organisation
  2. Setting up of teams and departments
  3. Division of responsibilities and power to people

• What were Fayol's principles? (10)

  1) Unity of command; one boss only
  2) Hierarchy of authority; everyone reports to one boss
  3) Divison of labor; areas of specialisation
  4) Team interest is most important
  5) Authority
  6) Centralisation
  7) Clean communication channels
  8) Order
  9) Equality
  10) Pride and loyalty 
  --> If these principles become rules, policies and regulations they create inflexibility.

• What did Weber add to Fayol's principles?

  - Employees just need to do what they're told
  - Job descriptions
  - Written rules, guidelines and detailed records
  - Consistent procedures, rules and policies
  - Staffing and promotion based on qualifications
  --> In favour of bureaucracy and believed that these principles were necessary for large organisation's effective functioning.

• What's bureaucracy and what are the consequences of it?

  - An organisation with many layers of mangers who set rules and regulations and oversee all decisions.
  --> Decision making and speed of change can be low and this can have a negative effect on customer service.

• What do 'division of labor' and 'job specialisation' mean?

  Division of labor; dividing tasks among workers to complete a job
  Job specialisation; dividing tasks into smaller jobs.

• What's the difference between centralisation and decentralisation?

  Centralised authority exists if top management makes all decisions while decentralised authority exists when the authority is delegated to lower levels.

• What's the difference between horizontal and vertical specialisation?

  - Horizontal; low influence from above, employees have large input
  - Vertical; power coming from the top, each employee is responsible for a specific area/set of duties.

• What's the difference between a tall and flat organisation structure?

  Tall -> many management layers
  Flat -> few management layers, large span of units

• What are the advantages of departmentalisation?

  1) In-depth skills and progress
  2) economies of scale
  3) good coordination, easily to delegate/control 

• What are the disadvantages of departmentalisation?

  1) little communication between departments
  2) department's goals instead of organisation's
  3) react too slow to changes
  4) specialists
  5) groupthink and need external input to be creative