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PART B: BUSINESS ORGANISATION STRUCTURE, FUNCTIONS AND GOVERNANCE 
 
142
 
 

 
An 
informal organisation 
always exists alongside the formal one. This consists of social relationships, 
informal communication networks, behavioural norms and power/influence structures, all of which may 
'by-pass' formal organisational arrangements. This may be detrimental or beneficial to the organisation, 
depending how it is managed. 

 
Mintzberg believes that 
all
organisations can be analysed into five components, according to how they 
relate to the work of the organisation, and how they prefer to co-ordinate. 

 
Organisations can be 
departmentalised
on a 
functional
basis (with separate departments for production, 
marketing, finance, etc), a 
geographical
basis (by region or country), a 
product
basis (eg worldwide 
divisions for product X, Y, etc), a 
brand
basis, or a 
matrix
basis (eg someone selling product X in country 
A would report to both a product X manager and a country A manager). Organisation structures often 
feature a variety of these types, as 
hybrid 
structures. 

 
In a 
divisional structure 
some activities are 
decentralised
to business units or regions. 

 
The strategic apex exerts a pull to centralise, leading to the 
simple structure
. 

 
Span of control
or 
'span of management'
refers to the number of subordinates responsible to a superior. 

 
Recent trends have been towards 
delayering
organisations of levels of management. In other words,