Organisational Design

Flashcards on organisational design principles, including hierarchy, chain of command, span of control, organisational structure types, and centralization/decentralization.

Hierarchy

A system in which people or things are arranged according to their importance.

Chain of Command

The structure in the organization which allows instructions to be passed down from senior to lower levels of management

Span of Control

Number of subordinates working directly under a manager

Authority

A person with authority has the right to carry out a particular task or duty

Delayering

Removing layers of management from the hierarchy of the organisation

Delegation

The passing down of authority

Organisational structure

Outlines the reporting relationships, roles, and responsibilities of employees in the organisation. It refers to the levels of management and division of responsibilities within a business.

Organizational chart

A diagram that visually conveys a company’s internal structure by detailing the roles, responsibilities, and relationships between individuals within the business.

Chain of command

The formal line of authority that flows down from the top management to lower-level employees. It defines who reports to whom and who is responsible for making decisions. It helps to establish a clear communication channel and helps to maintain accountability within the organization

Span of control

Refers to the number of employees that a manager or supervisor can effectively manage. It is based on the principle that a manager can only effectively manage a limited number of employees

Hierarchy

Refers to the levels of authority within an organization. It describes the ranking of positions from top to bottom.

Centralised structure

Decision-making authority is concentrated at the top of the organization with senior management making most of the decisions

Decentralised structure

Decision-making authority is distributed throughout the organization, with lower-level employees having more decision-making power

Tall Structure

Characterised by multiple levels of management and a more centralised decision- making process with A long chain of command.

Flat Structure

Characterised by fewer levels of management and a more decentralised decision-making process with A short chain of command

Matrix Structure

A type of organizational structure that combines functional areas of a business (such as HR, finance, marketing, and sales) with cross-functional teams that collaborate on projects. In this structure, employees have dual reporting relationships, typically to both a functional manager and a project manager, facilitating greater flexibility and communication across the organization.