1.4.3 - organisational design

organisational design

the framework that provides a business with a structure to achieve its objectives

organisational structure

the way a workforce within a firm is organised, including job roles + communication flaws

organisational chart

a visual representation of the structure

examples of a hierarchy within firms

tall and thin, wide and flat

tall and thin structure

each superior is responsible for a few subordinates, allows closer supervision + communication

wide and flat structure

each superior is responsible for a large number of subordinates, requires greater delegation but allows fewer levels + quick communication

chain of command

the way authority and power is passed down the levels of authority

span of control

shows the number of subordinates a manager or supervisor is directly responsible for

authority

the power of an employee to instruct subordinates, make decisions and control the use of resources

authority can be

centralised, decentralised

centralised authority

maintained by few at centre of firm

decentralised authority

spread across the firm

centralised authority includes

few decision makers, decisions are made by those at top of hierarchy, speeds up decision making, maintains tight control, bureaucratic

decentralised authority includes

delegating decision making, decisions made at many levels of hierarchy, frees up management time, provides motivation, reduces bureaucracy

influences on delegation for centralisation/decentralisation

attitudes/priorities of leaders, leadership styles, nature of decisions to be made, legal form, business objectives, responses to technology change, degree of confidence/stability in economic environment

tall structure advantages

narrow span of control

tall structure disadvantages

long chain of command, many hierarchy levels, communication may be difficult

flat structure advantages

few levels of hierarchy, short chain of command

flat structure disadvantages

wide span of control