4.1 - Organisational structures

Keywords
1. Organisational structure - The way a business arranges itself to carry out its activities
2. Organisational chart - A plan showing the roles of, and relationships between, all the employees in a business
3. Line manager - An employee's immediate superior or boss
4. Authority - The power to control others and to make decisions
5. The span of control - The number of employees managed directly by another employee
6. Levels of hierarchy - The layers of authority within a business
7. Chain of command - The line of authority within a business along which communication passes
8. Delayering - The removal of one or more levels of hierarchy from a business's organisational structure
9. Passing down of authority - passing down of authority to more junior employees
10. Communication - The exchange of information between two or more people
11. Decentralisation - Allows employees working in all areas of business to take decisions
  1. Managers may decide to decentralise as the organisation is large of to improve the effectiveness of the workforce s
12. Centralisation - Occurs when small number of senior managers in a business take all important decisions
  1. May be used where employees do not have the right skills to make decisions or the business cannot afford to pay for training
Why have organisational structures?
1. Organisational structure is a way for a business to arrange itself to carry out other activities effectively
2. Everyone in and organisation needs to know what their duties are and who they report to
3. Managers need to know which employees they have responsibility for
4. An organisational chart is a plan showing the roles of, and relationships between, all the employees in a business
Job Roles and responsibilities
1. 1. Shop floor workers are responsible to report to team leaders, aka line managers
    1. Team leaders report to managers
      1. Managers report to directors who report to chief executive officer (CEO)/ managing director who has ultimate authority over business
2. Directors
  1. Makes business overall goals
  2. Set long term plans and targets
3. Mangers
  1. Work to achieve short and long term goals set by directors
  2. Responsible for a function within a business e.g marketing
  3. Use employees and other resources in best possible ways
4. Team leaders/supervisors
  1. Help managers to achieve targets by reporting problems and passing on instructions
  2. Make simple decisions e.g. allocating jobs to different employees
5. Shop-floor workers/operatives
  1. Carry out business's basic duties or activities e.g. working on a production line
Spans of control and levels of hierarchy
1. 1. Span of control is the number of employees managed directly by another employee
  2. Levels of hierarchy are layers of authority in a business
Chains of command
1. Directors - set targets for business, issue instructions to managers on how to achieve this
  1. Managers - Give detailed instructions about target to team leaders who give instructions to shop floor employees
    1. Shop floor - take actions to meet targets
Delayering
1. 1. The removal of one or more levels of hierarchy from a business's organisational structure
  2. Often this is done to reduce costs e.g. remove middle managers
  3. Other employees may have to take on duties carried out by layer below or above them
Delegation
1. The passing down of authority to more junior employees. This frees higher employees to focus on higher level decision making and lower employees the chance to show they are capable of doing higher level work
  1. But may put pressure on lower employees or tasks may not be done to suitable standard
organisational structures
1. Tall
  1. 1. Managers could use a narrow span of control, this gives director, managers or team leaders a small number of employees to supervise. This means there a more layers
2. Flat
  1. 1. A wide span of control means there will be fewer layers of hierarchy and the organisation's structure can be called flat
Management styles and structures
1. 1. Downward communication - goes from senior to junior employees
  2. Upward communication - goes from junior to senior employees
  3. Horizontal communication - Happens between employees at the same level of hierarchy
2. Flat organisation structures - May means downward and upward communication is easier with employees having greater authority being more likely to communicate upwards
  1. However wider spans of control can means fewer meetings and more difficult horizontal communication resulting in less effective communication
3. Tall organisation structures can experience problems passing messages between layers with messages being confused
  1. However, withsmaller spans of control there can be more effective communication between managers and their staff
Decentralisation
1. Advantages
  1. Reduce pressure on senior managers
  2. Staff can be motivated as they have more power
  3. better decision making
  4. Decisions are made faster
2. Drawbacks
  1. All employees must understand aims and goals of the business
  2. Training may be needed
  3. Good communication with senior managers is needed

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4.1 - Organisational structures

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	Created by Rhianna Nicoll almost 6 years ago