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The Business Environment

The Business Environment. Key words for P3. Organisational structures. Businesses can be organised in 3 ways:

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The Business Environment

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  1. The Business Environment

  2. Key words for P3

  3. Organisational structures Businesses can be organised in 3 ways: • A functional structure is when the different departments of the business are organised by the different department specialism’s e.g. marketing, finance, human resources, customer service etc. • An area structure is when the business is divided into departments based on the different locations that the business operates in e.g. America, Europe & Asia etc. • A product structure is when the business is divided into groups based on the different products or services they produce and sell • e.g. Iphone, Ipad, Iwatch, Ipodetc.

  4. Examples:

  5. How is McDonalds organised? • Lets look at how McDonalds is organised? • What are the advantages of this of this structure? • What are the disadvantages of this structure?

  6. Functional Structure Chief Executive Board of Directors Production Marketing Accounts Personnel IT Advantages • Specialisation - each department focuses on its own work • It’s clear who is responsible for what • Everyone know their role • Departments may have • their own agenda • Co-ordination may be complex • Decisions take longer Disadvantages

  7. How is Coca Cola organised? • Lets look at how coca cola is organised • What are the advantages of this of this structure? • What are the disadvantages of this structure?

  8. Area Structure Coca Cola Americas Houston, Texas Europe Paris, London, Berlin Asia Pacific Hong Kong Disadvantages Advantages • Can adapt to local customers • Encourages competition between functions • Possible conflict between • local and central managers • 2) Duplication of some services

  9. How is Nike organised? • Lets look at how Nike is organised • What are the advantages of this of this structure? • What are the disadvantages of this structure?

  10. Product Structure Hewlett Packard Personal Systems Group Imaging and Printing Group Enterprise Systems Group HP Services HP Financial Services Disadvantages • Duplication of some services • May be too concerned with internal competition Advantages • A focus on products • Encourages competition between functions • Divisions can be separate profit centre

  11. THINK PAIR SHARE Organisational structures are not always as simple as splitting a business into functional, product or area structures. In what ways can organisational structures be more complex?

  12. Activity – Tesco research • Explain how Tesco has structured itself • Is it by function area or product? • Comment on: • the purpose of its structure • chains of command • spans of control • the hierarchy of the organisation • If you need help, use the textbook before using the internet

  13. Explain how the organisation has structured itself. Comment on the purpose of its structure, chains of command, spans of control and the hierarchy of the organisation Tesco is organised in a functional/area/product structure because… You can see elements of other structures, such as.. because… You can see the hierarchy of Tesco at…. The hierarchy is between…. The line managers of Tesco are… The chain of command for Tesco is… You can see the span of control because… Another aspect of the chart is The purpose of being organised in this way Tip: When you talk about each key term, you must give a defintion

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