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2.1 Internal Factors
Glossary for Internal Operations of a Large Business
| Term | Definition |
|---|---|
| Organisational Structure | The type of framework a company uses to distinguish power and authority, roles and responsibilities, and the manner in which information flows through the company. |
| Tall Organisational Structure | Has many levels of hierarchy and a short span of control |
| Flat Organisational Structure | Has few levels of hierarchy and a long span of control |
| Span of control | The number of people a manager is responsible for |
| Centralised Organisation | The authority to make decisions is concentrated within a particular group |
| Decentralised Organisation | The authority to make decisions is given to lower-level managers and employees in the organisation. |
| Functional Organisational Structure | The company is organised according in specialised departmental areas such as finance, marketing, operations and human resources |
| Matrix Organisational Structure | Reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy |
| Organisational Culture | The values and behaviours that contribute to the unique identity of an organisation |
| Power Culture | Is based on the dominance of one or a small number of individuals who make the key decisions for the organisation. |
| Role Culture | Exists in large hierarchical organisations in which individuals have clear roles (jobs) to perform which are closely specified |
| Task Culture | Exists when teams are formed to complete particular tasks |
| Person Culture | The most individualistic form of culture exists when individuals are fully allowed to express themselves and make decisions for themselves |
| Collaborative Culture | Two or more parties working together where people attend to personal interests but also to outcomes benefiting the whole |
| Production | The measured output of a business in a period of time. The process of turning tangible and intangible inputs into products. |
| Efficiency | How effectively a business is using its resources (time, money, labour, materials). Saving or minimising resources increases efficiency |
| Work Study | A system of assessing methods of working so as to achieve the maximum output and efficiency |
| Productivity | A measure of efficiency, measured in terms of the rate of output per unit of input |
| Lean Production | Using as few resources and eliminating waste to improve productivity in delivering value and quality from the customer's perspective |
| Economies of scale | Cost advantages that enterprises obtain due to size, output, or scale of operation. Average costs fall. |
| Diseconomies of scale | Describes when firms may become less efficient if it becomes too large. Average costs rise. |
| Capacity | How efficient a company is producing goods and services compared to its maximum production level. |
| Job Production | A method of prodution where each job is unique. Suitable for producing a variety of products at low volume |
| Batch Production | Producing a set quantity of one product at a time. |
| Flow Production | Production activities flow smoothly in one direction throughout the factory, suitable for large volume in a very efficient manner |
| Authoritarian Leadership | A leadership style in which the leader dictates policies and procedures, decides what goals are to be achieved, and directs and controls all activities without meaningful participation by lower levels |
| Paternalistic Leadership | A type of fatherly managerial style employed by dominant males where their organisational power is used to protect and control subordinate staff who are expected to be loyal and obedient. |
| Democratic Leadership | Involves a team guided by a leader where all individuals are involved in the decision making process to determine what needs to be done and how it should be done. The group’s leader has the final decision of the group. |
| Laissez faire Leadership | A non-authoritarian leadership style, these type of leaders try to give the least possible guidance to subordinates, and try to achieve control though less obvious means. |
| Horizontal Integration | When one business merges with another in the same industry and at the same stage of production |
| Vertical Integration | When one business merges with or takes over another in the same industry but at a different stage of production |
| Internal Controls | Systems, policies, procedures and practices to maintain the operational integrity (honesty, accuracy, transparency) of the business |
| Capital | A financial asset, such as cash |
| Balance Sheet | Also referred to as statement of financial position or condition, reports on a company's assets, liabilities, and Ownership equity at a given point in time |
| Income Statement | Also referred to as Profit and Loss statement, reports on a company's income, expenses, and profits over a period of time. |
| Cash flow Statement | Reports on a company's cash flow activities, particularly its operating, investing and financing activities.Cash is the life blood of a company |
| Retained earnings | Explains the changes in a company's earnings over the reporting period |
| Budget | A list of all planned future revenues and expenses |
| Levels of Hierarchy | Refers to the number of layers in a business |
| Bureaucracy | Overly complex and unnecessary official procedures that slow any administration |
Created by:
Mr Jones
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