Organisational design - chapter 16 (key terms)

Authority

The right to command and make decisions

Centralisation

A type of business organisation where major decisions are made at the centre or core of the organisation and then passed down the chain of command

Chain of command

The way authority and power is organised in an organisation

Decentralisation

A type of business organisation where decision making is pushed down the chain of command and away from the centre of the organisation

Delayering

Removing layers of management from the hierarchy of an organisation

Delegation

Authority to pass down from superior to subordinate

Formal organisation

The internal structure of a business as shown by an organisational chart

Hierarchy

The order or levels of responsibility in an organisation, from the lowest to the highest

Organisational chart

A diagram that shows the different job roles in a business and how they relate to each other

Responsibility

The duty to complete a task

Span of control

The number of people a person is directly responsible for in a business

Subordinates

People in the hierarchy who work under the control of a senior worker