Topic 9 - Organisational Design

Organisational Design

The process of shaping a business’s structure to clarify roles, responsibilities, and reporting relationships.

Hierarchy

The levels of authority and responsibility in a business, from top to bottom.

Chain of Command

The route through which decisions and instructions flow down the organisational structure.

Span of Control

The number of employees directly managed by one person.

Wide Span of Control

One manager oversees many employees — promotes autonomy, but less control.

Narrow Span of Control

One manager oversees few employees — allows closer supervision.

Delegation

Giving someone below you the authority to make decisions or complete tasks.

Delayering

Removing layers of management to flatten the hierarchy and reduce costs.

Advantages of Delayering

Faster decisions, cost savings, more responsibility for employees.

Disadvantages of Delayering

Fewer promotion opportunities, role confusion, increased workloads.

Matrix Structure

An organisational structure where employees report to two managers — usually by function and project.

Benefits of a Matrix Structure

Improves collaboration, shares expertise, supports project work and innovation.

Drawbacks of a Matrix Structure

Conflicting instructions, role confusion, requires strong communication.

Centralisation

Decision-making is kept at the top of the organisation.

Decentralisation

Decision-making is delegated to lower levels in the hierarchy.