4.2 - Organizational Structure

Why do businesses have organisational structures?

Businesses have to organise themselves to be able to carry out their activities effectively. It is important that everyone in the organisation knows:

• what their duties are

• the person or people that they have to report to

• the other employees in the organisation for whom they are responsible.

An organisational structure sets this out so that everyone in the business knows this information. Without this internal structure, a business would be very chaotic and not very productive.

What are some roles within a structure?

Chief executive, director, manager, team leader, worker

What departments are there

Admissions, Human resources, finance, communications,

Organisational structure (tall/flat)

• Organizational Structure: How a company is set up in terms of who works where and who reports to whom.

• Tall Structure: Many levels of management (more layers).

• Flat Structure: Fewer levels of management (less layers, more people at the same level).

Line Manager

• A person who is directly in charge of employees and their work.

• They give tasks, check progress, and help solve problems.

Authority

• The power or right to make decisions and give orders.

• Example: A manager has the authority to assign tasks.

Span of Control / Management

• The number of employees a manager is in charge of.

• A wide span means one manager oversees many people.

• A narrow span means a manager has only a few people under them.

Chain of command

• The path of authority in a company—from the top boss down to workers.

• Shows who reports to whom.

Delayering

• Removing levels of management to make the company structure flatter.

• It can make communication faster and reduce costs.

Centralization / Decentralization

• Centralization: Decisions are made by a few people at the top.

• Decentralization: Decisions are shared with more people at lower levels.

Supervisor

• Someone who watches over workers and their tasks.

• Often a first-level manager who helps make sure work is done properly.