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    Organisational Structure of A Business

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    1) Businesses need organizational structures to determine who is responsible for what jobs and who reports to whom as the business grows beyond a small size. 2) Organizational structures use hierarchies and charts to illustrate the levels of management and how employees report up the chain of command. 3) The span of control refers to the number of direct reports a manager has, with wider spans allowing fewer managers but potentially less control, while narrow spans require more managers but allow closer oversight.

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    Organisational Structure of A Business

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    40 views12 pages
    1) Businesses need organizational structures to determine who is responsible for what jobs and who reports to whom as the business grows beyond a small size. 2) Organizational structures use hierarchies and charts to illustrate the levels of management and how employees report up the chain of command. 3) The span of control refers to the number of direct reports a manager has, with wider spans allowing fewer managers but potentially less control, while narrow spans require more managers but allow closer oversight.

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    1) Businesses need organizational structures to determine who is responsible for what jobs and who reports to whom as the business grows beyond a small size. 2) Organizational structures use hierarchies and charts to illustrate the levels of management and how employees report up the chain of command. 3) The span of control refers to the number of direct reports a manager has, with wider spans allowing fewer managers but potentially less control, while narrow spans require more managers but allow closer oversight.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    40 views12 pages

    Organisational Structure of A Business

    Uploaded by

    Ringle Job
    1) Businesses need organizational structures to determine who is responsible for what jobs and who reports to whom as the business grows beyond a small size. 2) Organizational structures use hierarchies and charts to illustrate the levels of management and how employees report up the chain of command. 3) The span of control refers to the number of direct reports a manager has, with wider spans allowing fewer managers but potentially less control, while narrow spans require more managers but allow closer oversight.

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    Organisational Structure of a

    Business
    Why Do Businesses Need to
    be Organised?
     Small businesses (particularly sole traders) have an informal
    organisational structure
     As a business gets bigger then it starts to form some kind of
    organisation
     An organisation structure is required as soon as there are
    several people working in the business
     The structure determines:
     Who is responsible for what job and

     Who is responsible to whom.


    Hierarchy
     Describes management structure of business
     From top of company – managing director,
    through to shop floor worker
     Usually best understood by drawing an
    organisation chart
     Shows which levels of management and
    employees report to whom
    Example of a Hierarchy
    Span of Control
     What is the Span of Control?
     The number of people who report to one manager in a
    hierarchy
     The more people under the control of one manager - the
    wider the span of control
     Less means a narrower span of control
     Example below shows a span of control of 4 for the
    Marketing Manager

    Marketing
    Manager

    Customer
    Marketing Market Telesales
    Care
    Assistant Researcher Supervisor
    Assistant
    Advantage of a Narrow Span
    of Control
     Allows a manager to:
     Communicate quickly with employees under them
     Control employees more easily
     Feedback of ideas from workers more
    effective
     Requires a higher level of management skill
    Advantage of a Wide Span of
    Control
     There are less layers of management to pass
    a message through
     So the message reaches more employees
    faster
     It costs less money to run a wider span of
    control because a business does not need to
    employ as many managers
    Tall and Flat Organisations
     Tall organisation
     Large number of managers

     Narrow spans of control

     Can suffer from having too many managers (expensive)

     Decisions can take a long time to reach bottom of hierarchy

     Can provide good opportunities for promotion

     Manager does not have to spend so much time managing staff

     Flat organisation
     Few managers

     Wide span of control


    Centralised Organisations
     What are they?
     Organisations where important decisions are taken at the top and
    then passed out to the various departments / locations
     Advantages
     Tight control of decisions
     Decisions made by senior management
     Helps decisions to be consistent across the business
     Avoids repetition of functions (e.g. only one purchasing department)
     Disadvantages
     Lack of motivation for managers
     Central management may be “out of touch”
     May be slow to make decisions that need to taken quickly
    De-Centralised Organisations
     What are they?
     Organisations where important decisions are delegated to managers in
    other departments / locations
     Advantages
     Increased motivation of managers

     Encourages local initiatives

     Decisions based on more up-to-date information

     Decisions made quicker

     Disadvantages
     Managers may lack experience

     Local decisions may be inconsistent with the overall business aims and
    objectives
     Duplication of functions and costs
    Chain of Command
     Line on which orders and decisions are
    passed down
     From top of hierarchy to bottom Managing
    Director
    Production
    Director
    Production
    Manager
    Factory
    Supervisor

    Machine
    Operators
    Importance of Effective
    Delegation
     Delegation is giving authority for certain
    decisions to those below manager
     Gives manager more time to work on other
    aspects of business
     Also plays an important part in increasing job
    satisfaction and motivation of employees

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