Organisational structure - The way a business arranges itself to carry out its activities
Organisational chart - A plan showing the roles of, and relationships between, all the employees in a business
Line manager - An employee's immediate superior or boss
Authority - The power to control others and to make decisions
The span of control - The number of employees managed directly by another employee
Levels of hierarchy - The layers of authority within a business
Chain of command - The line of authority within a business along which communication passes
Delayering - The removal of one or more levels of hierarchy from a business's organisational structure
Passing down of authority - passing down of authority to more junior employees
Communication - The exchange of information between two or more people
Decentralisation - Allows employees working in all areas of business to take decisions
Managers may decide to decentralise as the
organisation is large of to improve the effectiveness
of the workforce s
Centralisation - Occurs when small number of senior managers in a business take all important decisions
May be used where employees do not have the
right skills to make decisions or the business
cannot afford to pay for training
Why have organisational structures?
Organisational structure is a way for a business to
arrange itself to carry out other activities effectively
Everyone in and organisation needs to know what
their duties are and who they report to
Managers need to know which employees they have
responsibility for
An organisational chart is a plan showing the roles of, and
relationships between, all the employees in a business
Job Roles and responsibilities
Shop floor workers are responsible to
report to team leaders, aka line
managers
Team leaders report to managers
Managers report to directors who
report to chief executive officer
(CEO)/ managing director who has
ultimate authority over business
Directors
Makes business overall goals
Set long term plans and targets
Mangers
Work to achieve short and long term goals set by directors
Responsible for a function within a business e.g marketing
Use employees and other resources in best possible ways
Team leaders/supervisors
Help managers to achieve targets by reporting problems and passing on instructions
Make simple decisions e.g. allocating jobs to different employees
Shop-floor workers/operatives
Carry out business's basic duties or activities e.g. working on a production line
Spans of control and levels of hierarchy
Span of control is the number of employees
managed directly by another employee
Levels of hierarchy are layers of authority in a business
Chains of command
Directors - set targets for business, issue
instructions to managers on how to achieve this
Managers - Give detailed instructions about target to team
leaders who give instructions to shop floor employees
Shop floor - take actions to meet targets
Delayering
The removal of one or more levels of hierarchy from a
business's organisational structure
Often this is done to reduce costs e.g. remove middle managers
Other employees may have to take on duties
carried out by layer below or above them
Delegation
The passing down of authority to more junior employees. This
frees higher employees to focus on higher level decision making
and lower employees the chance to show they are capable of doing
higher level work
But may put pressure on lower employees or tasks
may not be done to suitable standard
organisational structures
Tall
Managers could use a narrow span of control, this gives director,
managers or team leaders a small number of employees to supervise.
This means there a more layers
Flat
A wide span of control means there will be fewer layers of
hierarchy and the organisation's structure can be called flat
Management styles and structures
Downward communication - goes from
senior to junior employees
Upward communication - goes from junior to senior employees
Horizontal communication - Happens between
employees at the same level of hierarchy
Flat organisation structures - May means downward and
upward communication is easier with employees having
greater authority being more likely to communicate upwards
However wider spans of control can means fewer
meetings and more difficult horizontal communication
resulting in less effective communication
Tall organisation structures can experience problems passing
messages between layers with messages being confused
However, withsmaller spans of control there can be more
effective communication between managers and their staff
Decentralisation
Advantages
Reduce pressure on senior managers
Staff can be motivated as they have more power
better decision making
Decisions are made faster
Drawbacks
All employees must understand aims and
goals of the business