Exam Notes on Organisational Structure, Break-Even Analysis, and Motivation

Organisational Structure

• Organisational Chart: Diagram of job titles, communication lines, and responsibilities.
• Organisational Structure: How jobs, responsibilities, and power are organised.
• Levels of Hierarchy: Number of management layers.
• Chain of Command: Lines of authority.
• Lines of Communication: Information flow.
• Span of Control: Number of subordinates a job holder is responsible for.
• Work Load: Amount of work for an employee/team.
• Job Role: Tasks involved in a job.
• Delegation: Passing decision-making authority down the hierarchy.
• Communication Flows: How information moves within the organisation.
• Workforce Role: Tasks at a specific job level.

Break-Even Analysis

• Helps entrepreneurs make decisions about starting a new business.

Motivation and Engagement

• Motivation: Factors inspiring an employee to complete tasks.
• Employee Engagement: Employee is enthusiastic and absorbed in their work.

Financial Methods of Motivation

• Piece rate.
• Commission.
• Salary schemes.
• Performance-related pay.
• Profit sharing schemes.

Non-Financial Methods of Motivation

• Job enlargement.
• Job enrichment.
• Empowerment.
• Job rotation.
• Teamwork.
• Appraisal schemes.

Advantages & Disadvantages of Payment Systems & Bonus Schemes

• Piece Rate:
  - Advantage: Increased output per person.
  - Disadvantage: Quality may drop.
• Commission:
  - Advantage: Increased sales.
  - Disadvantage: Unethical techniques.
• Profit-Sharing Scheme:
  - Advantage: Encourages teamwork.
  - Disadvantage: Can be divisive.
• Performance-Related Pay:
  - Advantage: Encourages meeting targets.
  - Disadvantage: Unfair in service sector.

Methods of Improving Job Design

• Job Enlargement:
  - Advantage: Reduces boredom.
  - Disadvantage: Training costs, expectation of more pay.
• Job Rotation:
  - Advantage: Multi-skilling.
  - Disadvantage: Complicated to organise, skill variation.
• Job Enrichment:
  - Advantage: Develops managerial skills.
  - Disadvantage: High training costs.
• Team Working:
  - Advantage: Good working relationships.
  - Disadvantage: Potential for conflict, complacency.

Motivational Theories

Taylor and Scientific Management

• People work for money.
• Incentive (carrot) or threat (stick).
• Methods include:
  - Careful measurement.
  - Monitoring.
  - Control of workforce.
  - Incentive system: differential piece rate (e.g., 2p per unit for the first 500, 5p per unit after).
• Problems:
  - One best way doesn't account for individual differences.
  - Money isn't the only motivator.

Mayo and the Human Relations Approach

• Workers gain satisfaction from control.
• Teams support workers, influenced by group norms.
• Communication influences morale and output.
• Hawthorne effect: workers affected by interest shown in them.
• Problems:
  - Assumes shared goals between workers and management.
  - Communication doesn't always break barriers.
  - Biased towards management.

Maslow and the Hierarchy of Needs

• Needs (in order):
  - Physical.
  - Safety.
  - Social.
  - Esteem.
  - Self-actualisation.
• Problems:
  - Do all humans have the same needs?
  - Varying degrees of need?
  - Can needs ever be satisfied?

Herzberg's Two-Factor Theory

• Motivators: Job satisfaction (e.g., achievement, promotion).
• Hygiene Factors: Prevent dissatisfaction (e.g., pay, working conditions).
• Movement vs Motivation:
  - Movement: Doing something.
  - Motivation: Wanting to do something.
  - Job enrichment improves motivation.
• Problems:
  - Hygiene factors can be taken for granted.
  - Job enrichment can be expensive.

McGregor's Theory X and Theory Y

• Theory X: Authoritarian, tight control.
• Theory Y: Liberating, empowering.

Influences

• Costs and finances available.
• Management attitude.
• Management training.
• Workforce skill level.
• Public perception.
• Communication effectiveness.

Benefits of Motivated Employees