1.4.3 Organisational Design

What is a Chain of command

Formal line of authority

Structure that shows who reports to who

Span of Control

Number of players a manager supervises

Decentralised structure

Benefit

Decision making is distributed throughout the Business

Lower level employees have more decision-making power

Promotes Flexibility and Innovation

Centralised structure

Benefit

Senior management make most of the key decisions

Promotes consistency and control

2 organisational structures

Tall Structure

Flat Structure

Features of a Tall structure

Multiple layers of management

Long chain of command

Common is large organisations

Features of Flat structure

Fewer levels of management

More Decentralised decision-making

Short chain of command

2 Advantage + Disadvantage of Flat structure

+ Faster decision making

+ More collaboration leading to innovation + creativity

- May require employees to take multiple roles

- Less opportunites for promotion

2 Advanatage + Disadvantage of Tall structure

+ More specialisation + expertise for each role

+ Clear hierarchy of roles and responsibilities

- Decision making is slower as information takes longer to pass through the layers

- Staff at the bottom may feel disconnected or overlooked