Arab Open University

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Arab Open University
Tutor Marked Assignment (TMA)
Academic Year: 20 15 – 2016 Semester: First
Branch: KSA
Program: Business Studies Program
Course Title: An Introduction to Business Studies Course Code: B120
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Weight 35 35 30
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(0-5) (0-5) (0-5) (0-5)
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Notes on plagiarism:
A. According to the Arab Open University By-laws, “the following acts represent cases of cheating and
? Verbatim copying of printed material and submitting them as part of TMAs without proper academic acknowledgement and documentation.
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? Copying other students’ notes or reports.
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B. Penalties for plagiarism ranges from failure in the TMA to expulsion from the university.

Declaration: I hereby declare that the submitted TMA is my own work and I have not copied any other person’s work or plagiarized in any other form as specified above.
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Faculty of Business Studies
Tutor Marked Assignment
B120: An Introduction to Business Studies
First Semester, Fall 2015 (2015 – 2016)
Cut-off Date: 19th December 2015
This TMA will be marked out of 100 and is worth 20% of the course assessment. The TMA includes a case study on which you are required to answer three questions.
Structure less Organizations and Significance of organizational structure
A group of three friends decided to set up an organic Meal on Wheels service. They had a strong commitment to deliver good food to isolated elderly people. Their business model was collaborative and not-for-profit so they decided to share all the jobs between them. They took turns in ordering supplies, marketing, customer support, packing, delivering and finance.
The first year
The first year was busy, exciting, and successful. They started locally and built a good customer base. Word of mouth increased their success and by the second year they needed two more people to cook and deliver the orders. They were only five people so they all attended weekly meetings to share ideas and problems. The new staff became part of the team but had no ‘capital’ investment or emotional commitment to the organization.
They continued to succeed and increased their finance to extend the kitchens, buy more vans and extended contacts with individuals and care centres. They had turned a small social enterprise into a business.
After three years
These developments surprised them and after three years they realized the original idea was not working so well. Team meetings took hours, their role was not clear, the people they hired were not sure who was in charge and the outside agencies, banks, suppliers became confused about how to relate to them.
They had to decide next steps and contracted an expert in organization design and development. They spent a day looking at their aims, plans for the future, the way they worked, their staff, and their feelings. One of the original team decided it was not his career path and agreed to stand down as a working partner.
The other two divided the work. One was a good leader and planner, the other wanted to work with their customers and their staff. They decided to employ a good finance and admin person, and set up much clearer lines of authority and decision-making.
Structure followed
The functional structure was developed by them and was followed within their organization. The following is the structure they developed and followed:

Once the company had started following the above structure, they could do their jobs much better than before. Now their roles have been clearly defined and power and authority were clearly spelled out for each of the staff working for the organization.
In this case, we can see that an unplanned organization can run into difficulties. When they realized their problem, they had a number of options open to them. They could have closed down, merged with another agency, downsized, expanded or changed the product. What was essential was to go back to their original aims and personal commitment. It is these foundations that help to structure an organization and give it the shape and purpose it needs.
(Source: Adopted from, (with little modifications) accessed on dated 5th of October 2015)
Answer the following Questions
Question 1(35 marks)
It is argued that structure less organization leads to a business processes getting disorganized and the bosses start to act irresponsibly because they always try to shift the problems to other people instead of settling it themselves.
Define organizational structure and discuss some of the problems/challenges of keeping and running businesses structure less. Support your arguments with hypothetical examples

Question 2(35 marks)
Shtub and R. Karni (2010) argue that there is a difference between formal and informal organizations. Most formal organizations are based on a clear definition of responsibility, authority and accountability, while informal organizations are based on common interests, common beliefs, social values, feelings, tradition, etc.

Explain the meaning of formal and informal structure and elaborate on some of the advantages of a formal business structure. Provide relevant examples
Question 3(30 marks)

Sikavica (2011) argues that the organizational structure is the most prominent element of ‘visible’, formal organization while the organizational culture is primarily connected with ‘invisible’, informal elements of organization. Many authors also argue that organizational culture is the fundamental and decisive element of an organization functioning.
In light of the above,
Define organizational culture and discuss the relationship between organizational structure and organizational culture. Support your arguments with examples


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