1) Types of organisational structure

1) Types of organisational structure

1. Tall Structure

   • - Has many levels of management. - There is a long chain of command running from the top of the organisation.
   • Advantages
     • Narrow span of control which means managers have a small number of employees under their control (close supervision)
     • Clear progression and promotion ladder.
     • The function of each layer will be clear and distinct. Clear lines of responsibility and control
   • Disadvantages
     • The freedom of responsibility of employees is restricted.
     • Decision making could be slowed as approval may be needed from each level.
     • High management costs because managers are generally paid more than subordinates.

2. Flat Structure

   • Relatively few layers of management. Chain of command is shorter and span of control is wider.
   • Advantages
     • Greater communication between managers and subordinates
     • Better team spirit as fewer management layers increase interaction between employees at all layers.
     • Less bureaucracy and easier decision making.
     • Fewer layers reduces costs.
   • Disadvantages
     • Employees may have more than one manager as there are a number of managers at one level.
     • May hinder growth of the organisation, especially is managers have wide span of control.
     • Structure limited to small organisations
     • Lack of layers reduces promotion opportunities

3. Matrix Structure

   • Contains teams of people created from various sections of the business. Each team will have a specific purpose and be led by a project manager. Matrix structure usually deployed to develop products and services.
   • Advantages
     • Individuals can be chosen according to the need of the project.
     • A project manager is directly responsible within a specific deadline & budget.
   • Disadvantages
     • If teams have a lot of freedom it can be difficult to monitor.

4. Centralisation

   • Decision making is taken by senior management at the top of the business.
   • The use of standardised procedures can result in cost savings.
   • Decision making can be made for the benefit of the whole organisation rather than the benefit of one department.

5. Decentralisation

   • decision-making is spread out to include more junior managers in the hierarchy
   • Senior management will have time to focus on more important decisions.
   • Decision making is a form of empowerment.
   • People lower down will gain greater understanding of te environment they work in and this knowledge will make them more effective.