Business Structure Part2

ACCA P5 Advance Performance Management

Business Structure: Business Structure means positioning of human resource (i.e. the employee) that controls and makes use of other resources of business. Positioning of manpower depends on the size, type, activity, nature and strategy of business. Thus, business structure formally outlines strategic, tactical and operating styles of business.

From CIMA Article (Inter-relationship between strategy and structure)
It has often been written that structure follows strategy. Given the need to change strategy regularly it follows that the structure of organisations should also be under constant review.

For understanding different types of organisational structures (Functional, Divisional and Matrix) their strength and weakness visit the link provided for CIMA Article.

Organisational Culture

Ø  Power culture: Arrogant bossy director or Board with splitting role of CEO and Chair

Ø  Role culture: Seniority or Equality and freedom as in W. L. Gore and Associate

Ø  Task culture: Focus on getting work done

Ø  Person culture:

The Cultural Web:

Cultural web	Example	Schein
Symbols and titles	How people dress and how they are addressed	Artifacts: Current practice – influences on culture
Power relations	Autocratic or participative
Organisational structure	Tall-narrow or wide flat
Control systems	Highly centralized or decentralized
Rituals and routines	Regular start of week meeting	Espouse values : Believe over a period of time – focus strategic, goal of organisation
Myths and stories	Story about how organisation tackle challenges and conflicting situations
Organisational assumption (Paradigm)	Organisational existence to fulfill stakeholders objectives	Basic assumptions and values – taken for granted

Changing the paradigm: As business grows the strategy and structure and culture that fostered over the period demands paradigm shift. E.g. As a small entrepreneur grows to functional structure, the title of employee, power distribution, control mechanism, routines changes in line with stakeholders objectives. Or a shift of production organisation (machine bureaucratic) to service organisation (professional bureaucratic) needs adjustable paradigm shift.

ACCA Article: Accounting and organisational cultures

CIMA Article: Organisational Structures An Explanation

ACCA Article: Culture and Configuration