How Are Businesses Organised? Finance Marketing Operations Human Resources

 Look out for this symbol  It means you have to DO something!

Organisation Charts An Organisation Chart shows ALL the people who work in an organisation From the boss at the top ... … down to the newest office junior or cleaner

An Organisation Chart shows ALL the people who work in an organisation

From the boss at the top ...

… down to the newest office junior or cleaner

Why have a chart? who does what job who makes decisions who has authority over whom So that people who work in the organisation or who have contact with it, know:

who does what job

who makes decisions

who has authority over whom

Most organisations have a few people at the top ... (the ones who make the most important decisions) and more at lower levels ... (where they may not make any decisions at all)

Most organisations have a few people at the top ...

(the ones who make the most important decisions)

and more at lower levels ...

(where they may not make any decisions at all)

BOSS Managers Workers This means that most organisation charts are roughly this shape ... A Pyramid

And they look like this ... Manager A Manager B Workers X Workers Y Workers Z (LOOK CLOSELY AT THE LINES!) Boss

This chart shows that ... The Boss has overall responsibility and has authority over everyone Manager A is responsible to the Boss and is in charge of Workers X and Y ie has authority over them Manager B is responsible to the Boss and is in charge of Workers Z ie he has authority over them

The Boss has overall responsibility and has authority over everyone

Manager A is responsible to the Boss and is in charge of Workers X and Y ie has authority over them

Manager B is responsible to the Boss and is in charge of Workers Z ie he has authority over them

Line Relationships When a line is drawn between 2 levels , the person on the highe r level is said to be the LINE MANAGER of the person below. The Boss is Line Manager to Manager A and B Manager A Manager B Boss

The Boss is Line Manager to Manager A and B

Organisation charts can be described as FLAT ... Which means there are not many levels between the top and the bottom Level 1 Level 2 Level 3 Boss Managers Workers

Which means there are not many levels between the top and the bottom

Or TALL ... Which means that there are a lot of layers between the top and the bottom For instance, the organisation chart for the army would show a tall structure ...

Which means that there are a lot of layers between the top and the bottom

For instance, the organisation chart for the army would show a tall structure ...

General Colonel Major Captain Sergeant Corporal Private

Flat Structure Tall Structure

Hierarchies The Army is an example of a hierarchy , where layers are stacked according to grade or class The Civil Service is another example

The Army is an example of a hierarchy , where layers are stacked according to grade or class

The Civil Service is another example

Chain of Command Each grade or level gets its instructions from the one above and passes them on to the one below - this is called the CHAIN OF COMMAND

Each grade or level gets its instructions from the one above and passes them on to the one below - this is called the CHAIN OF COMMAND

Span of Control The number of staff that a person is responsible for. Manager A Manager B The Boss has a span of control of 2 – it is very narrow Manager A W W W W W W W W W W The Manager has a span of control of 10 – it is very wide Boss

The number of staff that a person is responsible for.

Which is better? Modern firms try to have a FLAT structure with fewer layers which means that Decisions are made faster More people are allowed to make decisions for themselves Communication is better

Modern firms try to have a FLAT structure with fewer layers which means that

Decisions are made faster

More people are allowed to make decisions for themselves

Communication is better

On the other hand ... A TALL structure has more layers which means It takes longer to make decisions Fewer people are involved in making the decisions ... It takes more time for information to get from the top to the bottom and there is more chance of a misunderstanding ...

A TALL structure has more layers which means

It takes longer to make decisions

Fewer people are involved in making the decisions ...

It takes more time for information to get from the top to the bottom

and there is more chance of a misunderstanding ...

Send reinforcements, we’re going to advance Send three and fourpence we’re going to a dance!

But ... In a FLAT organisation there may not be as many opportunities for promotion

In a FLAT organisation there may not be as many opportunities for promotion

And ... The work is shared amongst fewer people, so more work = more stress

The work is shared amongst fewer people, so

more work = more stress

Making changes to organisational structure Growth Downsizing De-layering Outsourcing As time goes on a business may choose or be forced into changing their organisational structure. There are many ways to do so:

Growth

Downsizing

De-layering

Outsourcing

GROWTH As a business grows/expands it may have the following effects: More staff may need to be employed which may lead to more levels of management, eg Supervisors, Assistant Managers. It may also mean more departments are required, eg Purchasing, Finance These changes may result in a taller structure being formed

As a business grows/expands it may have the following effects:

More staff may need to be employed

which may lead to more levels of management, eg Supervisors, Assistant Managers.

It may also mean more departments are required, eg Purchasing, Finance

DOWNSIZING This is where an organisation reduces the number of staff employed. It results in staff being made redundant (paid off). Downsizing means that the main departments are likely to remain but some staff/departments may have to take on more duties/responsibilities .

This is where an organisation reduces the number of staff employed. It results in staff being made redundant (paid off).

Downsizing means that the main departments are likely to remain but some staff/departments may have to take on more duties/responsibilities .

OUTSOURCING Outsourcing results in the organisation buying in specialist skills as required eg IT, security, canteen. Businesses outsource work because they may not possess the necessary expertise or equipment themselves, or because they do not have the need to have those staff all of the time.

DE-LAYERING This is where an organisation REMOVES certain levels (layers) of management posts. De-layering results in a FLATTER structure. De-layering normally leads to some members of staff: having increased responsibilities looking after more staff (increased span of control)

This is where an organisation REMOVES certain levels (layers) of management posts.

De-layering results in a FLATTER structure.

De-layering normally leads to some members of staff:

having increased responsibilities

looking after more staff (increased span of control)

  Access the Gillette website and answer the questions on Worksheet How Businesses are organised worksheet 1

Managers A manager is brought into a business to manage all resources – people, money and materials. Managers are people and this means that the style of management will change from manager to manager. Some managers give their workers more freedom than others. There are 3 types of manager: AUTOCRATIC MANAGER DEMOCRATIC MANAGER LAISSEZ FAIRE MANAGER

A manager is brought into a business to manage all resources – people, money and materials.

Managers are people and this means that the style of management will change from manager to manager. Some managers give their workers more freedom than others.

There are 3 types of manager:

AUTOCRATIC MANAGER

DEMOCRATIC MANAGER

LAISSEZ FAIRE MANAGER

Autocratic Manager This type of manager/leader tends to make all the decisions on their own. The opinions of other people are not asked for. This leader expects everyone to do as they are told. EXAMPLES A Captain on a ship makes all the decisions. The Army and other Armed forces will have this type of leader also. Things can be done quite quickly because there is no consultation. Remember – some people like to be told what to do all the time!

This type of manager/leader tends to make all the decisions on their own.

The opinions of other people are not asked for.

This leader expects everyone to do as they are told.

EXAMPLES

A Captain on a ship makes all the decisions.

The Army and other Armed forces will have

this type of leader also.

Democratic Manager This type of manager/leader shares some of the decision making with the worker. The leader still makes the decision but has asked the workers their opinions and then persuades the worker to adopt the idea as their own The workers tend to like the decisions made because they feel have been consulted. EXAMPLES Richard Branson is said to be this kind of leader

This type of manager/leader shares some of the decision making with the worker.

The leader still makes the decision but has asked the workers their opinions and then persuades the worker to adopt the idea as their own

The workers tend to like the decisions made because they feel have been consulted.

EXAMPLES

Richard Branson is said to be this

kind of leader

Laissez Faire Manager This type of manager/leader lets the staff do their own thing and make most of the decisions themselves As long as the work gets done (and on time) the manager does not really involve themselves in every day decision making. The workers feel important because they are making their own decisions, which improves staff motivation This style of leadership works best in creative industries eg, design and film making.

This type of manager/leader lets the staff do their own thing and make most of the decisions themselves

As long as the work gets done (and on time) the manager does not really involve themselves in every day decision making.

The workers feel important because they are making their own decisions, which improves staff motivation

This style of leadership works best in creative industries eg, design and film making.