BUSINESS: U1: CH 16: organisational design

organisational structure

the way in which positions within the business are arranged

organisation chart

a diagram that shows different job roles in a business and how they are related

authority

the employee has the ability to carry out a task

responsibility

the employee is accountable for the work of others

hierarchy

the number of levels of management in an organisation

chain of command

the way authority and power is organized in a buisness

span of control

the number of subordinates a person controls

tall organisations characteristics

-many layers of hierarchy

-narrow span of control

-longer chain of command

adv and limitations of tall organisations

+increased control over subordinates

+clear career path for promotion which motivates

-poor communication

-long decision making excessive approvals required

-employee might be demotivated

flat organisations characteristics

-few layers of hierarchy

-wider span of control

-shorter chains of command

centralized organisation

major decisions are made at the center (by the bosses) of the organization and passed down the chain of command

decentralized organization

decisions are made by employees who are relevant to the process

matrix structure

-only suitable when the business works on a project

-staff are involved in a series of projects which is interesting and motivates them

matrix structure adv and disadv

+increased specialization and expertise

+increased flexibility

+effective HR cost management

+increased motivation for employees

-requires management oversight

-increased coordination difficulties

-decision making can be slow