BTEC National Diploma

BTEC Award/Certificate/National Diploma

Information Systems – lecture 8

Matrix

In a matrix structure it is possible that each member of the organisation belongs to two or more groups. A matrix structure is therefore a combination of structures that enables employees to contribute a mix of activities.

For example, employees may be organised both by function (marketing, finance) and by product (production provision). In this example, some employees would be accountable to the marketing manager as well as the division manager.

The matrix enables the organisation to focus upon a number of aims at the same time, and gives it flexibility to respond to new markets where there is an increased demand for goods and services. Another benefit is the cross-fertilisation of ideas between departments.

The disadvantages are that a matrix may be difficult to understand, and employees may therefore lose sight of operational aims. The system may well involve more than one chain of command, leading to power struggles, contradictory orders and general confusion.

Co-operatives

Co-operatives are increasingly popular as a means of business organisation.

The basic idea behind a co-operative is that people join together to make decisions, work and share profits. There are different types of co-operatives:

The three most common are:

Retail Co-operatives

The first successful co-operative was set up in the Northern town of Rochdale in the last century.

Twenty eight workers clubbed together to start their retail shop, selling a few basic grocery items.

The profits were to be shared according to the amount spent, and everyone would have an equal say in how the shop was run.

The basic ideas started in Rochdale continue in today’s Co-op.

On buying a share in the Co-op (For £1) you are entitled to go along to the annual general meeting to discuss policy.

Consumer co-operatives are usually registered as limited liability companies. Marketing Co-operatives

Marketing co-operatives are most frequently found in farming areas. The farmers set up a marketing board to be responsible for other things:

grading packaging distributing advertising sale of products

Producer Co-operatives

Producer co-operatives are usually registered as companies ‘limited by guarantee’, which means that each member undertakes to fund any losses up to a certain amount.

There are many types of, workers co-operative, for example, one that employs all or most of its members. In a worker co-operative members:

share the responsibility for the loss or failure of the business work together take decisions together share the profits

The main problems with a co-operative

finance organisation difficult to raise capital, due to mainly to the fact that they do not seek primarily to make a profit

A number of co-operatives recently have been able to raise finance by selling shares.

Limited liability

Limited liability means that, if the business goes bankrupt because it is unable to meet its debts, the shareholders/owners will not be liable to lose their possessions to pay money that is owned. The maximum amount they could lose is the amount that they have put into their shares.