Unit 6.3 - Improving Organisational Design

Job design

The process of determining what a job involves, how it is carried out and how it relates to other relevant jobs.

Includes:

Duties and responsibilities

Methods of carrying out the job

Placement in the organisation

Hackman and Oldham's Job Characteristics Model (Last paper Y13 2024)

A model that is based on the idea that the workplace task itself is key to employee motivation. Specifically, a boring and monotonous job stifles motivation to perform well, whereas a challenging job enhances motivation. - 5 key char

Hackman and Oldham's 5 core job characteristics (last paper Y13 2024)

Skill variety - using an appropriate amount of skills, not too many (overwhelming) and not too few (boring)

Task identify - being able to identify the work at hand as a part of a whole (i.e completing a whole car as a team instead of 1 person only doing 1 part)

Task significance - seeing that work is contributing to the wider objectives

Autonomy - individual has freedom and independence

Feedback - provided with information on progress and how to improve in the future

Hackman and Oldham's Job Characteristics Model (image - last paper Y13 2024)

Job enrichment

Employees job are redesigned to provide them with more challenging and complex tasks

- increase complexity of tasks

- Give employees greater responsibility

Job enlargement

Increasing the number of similar tasks or duties in a job role

Job rotation

Employees switch regularly from one duty to another

Empowerment

Series of actions designed to give employees greater control over their working lives

Organisational design

shaping an organisations employees in a way which helps them to meet their objectives

Organisational structure

The way a business is arranged to carry out its activities

Span of control

how many employees a manager is directly responsible for

Authority

power to make decisions

Hierarchy

division of authority and accountability

Delegation

transferring responsibility or authority to junior employees

Chain of command

the line of authority that moves from the top of a hierarchy to the lowest level

Flat organisational structure

wide spans of control and a short chain of command. There are less levels of hierarchy

Tall organisational structure

narrow spans of control and a long chain of command. There are more levels of hierarchy.

Key features of narrow spans of control (tall structure)

- More promotional opportunities because more layers, but leads to higher wage costs

- Less delegation might mean low morale for junior employees

- Allows tight control, good for quality/safety/security

- Important information may be lost in vertical communication

- Longer chain of command means slower decision making

Key features of wide spans of control (flat structure)

- Individual managers have less time for each junior and must delegate

- More delegation means employees may feel motivated but may become overworked

- Vertical communication (top to bottom and vice versa) is improved

- Lower wage costs + easier vertical communication = higher efficiency

- Shorter chain of command means quicker decision making

Benefits of delegation

Frees up management time

Motivating for workers

Local knowledge

Flexibility and quicker response times

Staff development

Drawbacks of delegation

- Difficult in small organisations

- Customer expectations might not be met

- Attitudes and approach of management might not match delegation style

- Quality of staff and can they be trusted

- Crisis situations may not be handled well

- Confidentiality may not be possible

Centralisation

control is maintained in the middle of the organisation at head office

Decentralisation

control is passed to staff at local levels and to subordinates

Benefits of centralisation

Consistent policies and standardised procedures

Decisions are made quickly without consulting regions

Customers know what to expect

Financial control is easier

Decisions are based on the overall strategy of the organisation

Strong leadership is helpful in times of crisis

Drawbacks of centralisation

- More bureaucratic - often extra layers in the hierarchy

- Local or junior managers are likely to much closer to customer needs and have better knowledge of needs

- Lack of authority down the hierarchy may reduce manager motivation

- Customer service does misses flexibility and speed of local decision-making

Benefits of decentralisation

Motivating for local managers

Audience can be targeted more effectively

Less daily communication needed

Senior managers can focus on wider strategy

Responsive to changes in customer needs

Drawbacks of decentralisation

-Poor decisions by junior managers could harm the whole business.

-Consistent policies may not always followed.

Training could also be costly

- Customers may not enjoy lack of consistency

- Local managers may lose touch with the bigger picture

Types of organisational structure

- Functional structure:

- Geographical/region based

- Product-line based

- Matrix structure

(also have generic flat and tall)

Functional organisational structure

the traditional management structure consisting of a different department for each of the main functions of the business i.e operations, HR, Marketing, Finance

- They are based on hierarchy in which each department operates separately but under the leadership of those above it

- Coordination between different functions must occur at the top (inflexible)

- Size of each function varies to business needs

- Employees have specialist skills

Impact

- Members of each department have the same job area - can share expertise, help problem solve and talk the same business language

- Can identify more with department than the whole business

- Each department can develop its own culture and way of seeing things

- ‘Silo effect’ - where everyone sees the business from their departmental perspective

- Lack empathy with other departments

Regional/geographical organisational structure

Structure based on the location of operations, could be different parts of the same country or different countries all together

Impact

- Useful when competing in very distinct regions of a country or around the world

- Meets specific issues and demands in areas as they may vary

- Lead to more in depth market knowledge, better matching of what is offered to the market and more efficient decision making

- Common as businesses expands nationally

- Faces similar issues as product structure

Product based organisational structure

Structure based on different goods or services produced, each is separated into its own department and structure

Impact

- Occurs when a business has very clear product lines that have different customer bases and different challenge and opportunities

- Makes sense if the demands of customer vary significantly

- Groups together those with specific expertise and skills for that group of customers

- Loses a sense of overview of the business as a whole

- Compete rather than cooperate

- Duplication of resources

- Senior managers should look to share resources and centralise some functions such as payroll

Functional based organisational structure (diagram)

Regional and product based organisational structures (diagram)

Matrix organisational structure

- Combination of two or more types of structure at once, leading to job holding have more than one boss

- Tends to be used alongside functional, not instead of it

Impacts

- Enables individual projects to be better coordinated

- Lines of authority can become unclear

- Different departments can share knowledge

- Motivating

- Two bosses can be overwhelming

- Managers report to at least two superiors

- Can’t just focus on your area but also the other areas

- Want to share understanding and learn from others in other places

- Tries to avoid ‘silo effect’ - compartmentalising too much can lead to inefficiencies

- Issues from having two superiors who may have different priorities

Matrix organisational structure (diagram)

Influences on organisational structure, delegation and decentralisation

Business objectives

Size of the organisation

Nature of the organisation

Culture

Management style

Skill of workforce

External environment

Stakeholders

How managing HR helps to meet objectives (diagram)

Internal influences on HR plans

Strategic plan and corporate objectives

Marketing and production plans

Financial position

Number of workers

Labour turnover

External influences on HR plans

Market conditions

Labour market / demographics

Economy and government policy

Legislation

Local factors

Recruitment and selection

The process of filling an organisation's job vacancies by appointing new staff

Internal recruitment

filling a job vacancy by selecting a person who is already employed by the organisation

External recruitment

filling a job vacancy by advertising outside the organisation

Benefits of internal recruitment

The employee's abilities are known already

Motivating for employees

Quicker and less expensive process

Shorter induction period is needed

Less risky

Benefits of external recruitment

It often provides a large choice of well qualified candidates

New ways of thinking are introduced

Helps to avoid negative colleague dynamics

Valuable information on competition

Training

Process whereby an employee gains job related skills and knowledge

Possible reasons to train

New products / services

Change of organisational structure

Developing / introducing new technology

Changes to procedure i.e customer service

High labour turnover

Low morale

Changes in legislation

On-the-job training

training that takes place in the work setting, learn by observing experienced employee

Off-the-job training

Training that takes place away from the work area by visiting a separate organisation

Benefits of on-the-job training

Cheaper

More specific to business

Bad habits

Willingness of instructor

Benefits of Off-the-job training

More expensive

More generic

Higher quality (done by experts)

Less immediate pressure

Benefits of training

- Helpful for new employees

- Employees are skilled

- Motivating

- Increases efficiency and productivity

- Improved chances of promotion

- Reduces cost in the long run

- Encourages employees to be flexible

- Improves reputation of the company (reduced defects, better customer service etc)

- Encourages employees to work towards corporate aims

- Employee business reputation as good employer