Standard Grade Administration - Organisational StructurePresentation Transcript
Introduction to Business Organisations Organisation of Departments Standard Grade Administration
An Organisation Chart is used to show the structure of an organisation. An example is shown here: ORGANISATION CHARTS
What Does An Organisation Chart Show?
The management structure and main departments within an organisation
The relationship between departments
The reporting structure
The span of control of each employee (the number of people a person has responsibility for)
Who Would Use An Organisation Chart?
Visitors to the organisation
New members of staff
ADVANTAGES OF ORGANISATION CHARTS
Customers or visitors to a firm can gain an immediate impression of the overall size of an organisation
Employees can see at a glance who reports to who
Employees can see who they are responsible for
Useful for new employees to get a feeling for the whole business
DISADVANTAGES OF ORGANISATION CHARTS
Information in an organisation chart will be out of date if employees leave the firm or new employees join.
What information does an organisation chart show?
An organisation chart shows the positions
of employees within the organisation – their names, room number, telephone extension number etc
It also shows:
LEVELS OF RESPONSIBILITY
LINES OF COMMUNICATION
LINES OF RESPONSIBILITY (LINE RELATIONSHIPS)
LEVELS OF RESPONSIBILITY Those members of staff who carry out similar activities in the organisation SENIOR MANAGEMENT MIDDLE MANAGEMENT JUNIOR MANAGEMENT SUPERVISORS, SENIOR ASSISTANTS LOWER LEVEL EMPLOYEES
LINES OF COMMUNICATION Organisations must communicate information efficiently and effectively in order for it to survive and grow If there are many levels within the organisation there is more chance of communication breaking down as information is handled by more people The chain of command shown is: Board of Directors Managing Director Sales Director Sales Manager Board of Directors Managing Director Sales Director Sales Manager
LINES OF RESPONSIBILITY These show people in the organisation who are in charge of the work of other members of staff. Line Relationships These exist between line managers and the staff immediately below them. Members of staff are accountable to their line manager for any actions decisions they take. Line relationships are shown by VERTICAL lines on an organisation chart. The Sales Director is in charge of the work carried out by both the Sales Manager and Marketing Manager A line relationship exists between the Sales Director and the Marketing Manager in the above example Sales Director Sales Manager Marketing Manager
LATERAL RELATIONSHIPS These exist between employees who are on the same level and who report to the same line manager. The employees CANNOT give instructions to each other. Lateral relationships are shown by HORIZONTAL lines on an organisation chart. A lateral relationship exists between the Sales Manager, the Finance Manager and the Personnel Manager. They are all on the same level of responsibility, they all report to the same manager and neither can give the others orders. Personnel Manager Finance Manager Managing Director Sales Manager
There are 2 main types of organisational structure
Few levels of management
Managers have wider span of control
Many levels of management
Managers have narrow span of control
Examples of Tall Organisations
It may take longer to communicate decisions and information throughout the organisation
The management structure may be costly due to many highly paid jobs
Employees may not the opportunity to suggest ideas or show initiative
Easier for managers to supervise staff
More opportunity for promotion
Employees more likely to know their immediate boss
Examples of Flat Organisations
Small Shops eg Newsagent, Chip Shop
Employees may become more stressed due to increased workload
Increase in amount of training needed – due to employees wider responsibilities
Fewer opportunities for promotion to management posts
Employees have more responsibility – should result in staff feeling valued/motivated
Fewer levels of management – more efficient communication
Employees more likely to be involved in decision making process
Changing the organisational structure Organisations are unlikely to remain the same year after year. The business may be growing in size or it may have to reduce its operations.
METHODS OF RESTRUCTURING
Growth – the organisation is becoming larger. More staff are employed by the organisation. New departments may need to be created.
Downsizing – the organisation has to make cut backs without reducing output – some staff may be made redundant, others will find themselves with increased responsibilities.
Delayering – the organisation removes certain levels of management. This results in managers having wider spans of control and the organisation having a flatter structure
What are the benefits and problems of restructuring?
Low staff morale through redundancies, increased workload etc
Staff may not like the new structure and want things to stay the same
Costs of restructuring – associated with moving to new departments
Customers may be unfamiliar with the new structure
Reduction in costs – staffing costs, general running costs (Delayering & Downsizing)
To become more efficient
To improve communication within the organisation (Delayering)