Unit 4 - 4.1a Organization and management
Organisation and Management Notes
4.1 Organisation and Management Overview
Focus on understanding key elements of organizational structure.
Concepts to cover: organizational structure, organizational chart, span of control, levels of hierarchy, chain of command, delayering.
Understanding Organizational Structure
Definition: The way businesses share and organize work and formalize relationships among personnel.
Visual Representation: Commonly depicted through an Organizational Chart.
Key Concepts
Specialization:
Definition: Dividing tasks among different individuals to improve efficiency.
Example: Distinction between roles in advertising and product development.
Departmentalization:
Definition: Grouping individuals performing similar tasks.
Example: All employees working in Operations are grouped together.
Chain of Command:
Definition: Hierarchical structure that defines supervision and communication flow.
Example: Regional Managers oversee Customer Service and Store Managers and have authority over them.
Span of Control:
Definition: Number of subordinates directly managed by a supervisor.
Example: A CEO can oversee multiple departments while a Marketing VP may handle fewer.
Width of Span of Control
Wide Span:
Advantages: Faster communication, lower costs, more empowerment.
Disadvantages: Potential for manager overload, risk of losing control of subordinates.
Best For: Experienced subordinates requiring less oversight.
Narrow Span:
Advantages: Closer supervision, better communication, increased support.
Disadvantages: Slower decision-making, demands more time from managers.
Best For: Complex tasks or when employees need more guidance.
Hierarchical Structure
Hierarchy:
Levels of management, from highest to lowest.
Higher level = More decision-making power.
Subordinates follow directions from higher-ups, allowing for task delegation.
Delegation:
Definition: Assigning authority to subordinates for task completion.
Advantages for Managers: Efficiency, work measurement.
Advantages for Subordinates: Increased responsibility and trust.
Disadvantages: Potential loss of managerial control.
Tall vs Flat Organizational Structures
Tall Organizations:
Characteristics: Opportunities for promotion, more control but slower decision-making.
Issues: Too specialized jobs, managerial distance from action.
Flat Organizations:
Characteristics: Faster decision-making, improved communication, complex jobs.
Issues: Limited promotion opportunities, larger span of control.
Best Practice: Balance - "As flat as possible, as tall as necessary".
Delayering
Definition: Removing layers of hierarchy to increase efficiency and adaptability.
Centralisation vs Decentralisation
Advantages of Centralisation:
Uniformity and standardization.
Allowing for better control.
Disadvantages: Lack of responsiveness to local needs, potential demotivation.
Advantages of Decentralisation:
Quicker decision-making.
Better responsiveness to local customer needs.
Disadvantages: Possible lack of oversight and uniformity.
Case Study: The Home Depot
Example of decentralization where store managers make decisions based on local customer needs vs central corporate decisions.
Centralization: Definition: The concentration of decision-making authority at the top levels of the organizational hierarchy. This structure ensures uniformity and control over operations but may lead to drawbacks such as a lack of responsiveness to local needs and potential demotivation among employees.
Decentralization: Definition: The distribution of decision-making authority closer to the operational levels and local management. This structure facilitates quicker decision-making and responsiveness to customer needs but can result in challenges such as a lack of oversight and potential inconsistencies in decision-making across the organization.