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ACCA Applied Knowledge · Business and Technology · Business organisational structure

Zentra Ltd employs a small core team of managers who design its products. Manufacturing, logistics and customer support are all contracted to external specialist firms, and the core team coordinates them through technology. Which organisational form does Zentra most closely resemble?

Zentra resembles a network or virtual organisation. It keeps a small core team and outsources manufacturing, logistics and support to external firms, coordinating them through technology, whereas the other forms all organise activity internally within the firm.

  1. ANetwork (virtual) organisationCorrect
  2. BDivisional structure
  3. CFunctional structure
  4. DMatrix structure

Explanation

A network or virtual organisation keeps a small core and outsources major activities to external partners, coordinating them through information technology. A divisional structure splits the business into semi-autonomous units owned by the firm. A functional structure groups staff by specialism inside the firm. A matrix has dual reporting lines inside the firm.

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