3. FEATURES OF ORGANISATIONAL STRUCTURES

FEATURES OF ORGANISATIONAL STRUCTURES: DEFINE

Outline of how activities are directed to achieve the goals of an organisation, shows direction of work through an organisation

FEATURES OF ORGANISATIONAL STRUCTURES: DESCRIBE

Traditional organisation charts usually illustrated in form of a pyramid with workers at bottom (most employees), with supervisors or managers above

• not as many managers are quirked as workers

An organisation structure illustrates the relationships in a business

• who works for who

• Businesses choose an organisational structure based on many factors, including their size, geographic dispersion and the number of different products and services they offer

Two features of an organisation structure is:

1. Chain of command

2. Span of control

CHAIN OF COMMAND: DEFINE

The line on which orders and decisions are passed down from top to bottom of the hierarchy

CHAIN OF COMMAND: DESCRIBE

• divides tasks and makes people accountable for their roles

• Passes from executive upper levels of management, in a downward direction to middle management and then frontline

CHAIN OF COMMAND: EXPLAIN

• helps prevent confusion that might arise when multiple people are trying to make deductions about the same organisational goal

• This helps keep an organisation running smoothly by ensuring everyone knows where they fit in

• Without a clear chain of command, misunderstanding and conflict are more likely overlapping roles and responsibilities

DELAGATE

Delegating is the passing down of responsibility in the direct chain of command to a subordinate

• employees under the control of another is referred to as subordinates

• This allows a team leader to develop management skills for possible promotion and therefore increases motivation

• Original manager still holds responsibility and is accountable for the subordinates actions

SPAN OF CONTROL: DEFINE

Number of people who directly report to one manager in a hierarchy

SPAN OF CONTROL: DESCRIBE

Can be described as either wide or narrow

• if a business has a large number of subordinates than other departments or like business, it is considered wide

• Tall organisation has a larger number of managers with a narrow span of control whilst a flat organisation has few managers with wide span of control

SPAN OF CONTROL: EXPLAIN

Width of span of control depends on:

• type of product being made: products which are easy to make or deliver will need less supervision and so can have a wider span of control

• Skills of managers and workers: more skilful workforce can operate with wider spans of control because they will need less supervision. More skilful manager can also control greater number of staff

ORGANISATIONAL STRUCTURE; EXPLAIN

Span of control and chain of command is important because it determines:

• authority and responsibility

• People to whom others are accountable

• Formal routes through which communication flows in the business

Organisation structure chain of command and span of control will depend on several factors:

Factor 1: size of business: small business will tend to have informal or flat hierarchical structures

• larger and more complex businesses will develop more complicated and detailed structures involving more layers of hierarchy, departments and functions

Factor 2: type of business

Factor 3: management and leadership styles: autocratic leadership style will often result in very different compared to a leader who prefers to delegate responsibility

Factor 4: competitive environment: organisational structures usually influenced and changed by developments in market, for example, changes in the use of distribution channels, suppliers, competition actions

ORGANISATION STRUCTURE: DISCUSS

• tall organisation can suffer from having too many managers (huge expense) and decisions can take a long time to reach the bottom of the hierarchy BUT a tall organisation can provide good opportunities for promotion and the manager does not have to spend so much time managing the staff

• There are some strong arguments in favour of a business hav fewer rather than many layers in the hierarchy

• Business may develop tall hierarchy over time which becomes costly and inefficient

• If management attempt to remove one or more layers from hierarchy, known as flattening

• Frequently, the layers removed are those containing middle managers

• Flattening usually means increasing average span of control of senior managers within business and is seen as a way of reducing operating costs, particularly as a response to economic downturn

FLATTENING

ADVANTAGES:

• offers opportunities for delegation, empowerment and motivation as number of managers is reduced and more authority is given to shop-floor workers

• Can improve communication within the business as messages have to pass through fewer levels of hierarchy

• Can remove departmental rivalry if department heads are removed as workforce is organised in teams

• Can reduce costs as fewer employees are required and employing middle managers can be expensive

• Can encourage innovation

• Brings managers into close contact with business’ customers

DISADVANTAGES:

• not all organisations are suited to flatter organisational structures - mass production industries with low skilled employees may not adapt easily

• De-layering can have a negative impact on motivation due to job losses, especially if it is really just an excuse for redundancies

• Period of disruption may occur as people take on new responsibilities and fulfil new roles

• Those managers remaining will have wider span of control which, if it is too wide, can damage communication within business

NARROR SPAN OF CONTROL

ADVANTAGES:

• allows manager to communicate quickly with employees under them and control them more easily

• Feedback of ideas from workers will be more effective

• Requires higher level of management skill to control greater number of completes, so there is less management skill required

WIDE SPAN OF CONTROL

ADVANTAGES:

• less layers of management to pass message through so message reaches more employees faster

• Costs less money to run wider span of control as business does not need to employ as many managers