1.4 Organisational design

Hierarchy

A system in a business where employees are ranked due to their status and authority

Organisational structure

The way people and management are organised in a business

Organisational design

A diagram or chart which shows the lines of authority and layers of the hierarchy of a business

Delegation

The process of passing down authority to employees lower down in the hierarchy

Span of control

The number of people a manager us responsible for

Narrow span of control

- Allows for closer supervision

- More effective communication

- More layers in the hierarchy mane be needed

Wide span of control

- Allows for more independence

- Reduces number of managers which is cost effective

Span of control depends on...

- experience of the manager

- The size and complexity of the business

- Whether the business is centralised or decentralised