Standard Grade Business Management - Business OrganisationPresentation Transcript
How Are Businesses Organised? Finance Marketing Operations Human Resources
Look out for this symbol It means you have to DO something!
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:
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
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
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
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 ...
General Colonel Major Captain Sergeant Corporal Private
Flat Structure Tall Structure
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
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
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
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 ...
Send reinforcements, we’re going to advance Send three and fourpence we’re going to a dance!
In a FLAT organisation there may not be as many opportunities for promotion
The work is shared amongst fewer people, so
more work = more stress
Making changes to organisational structure
As time goes on a business may choose or be forced into changing their organisational structure. There are many ways to do so:
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
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.
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
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:
LAISSEZ FAIRE 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.
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 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.
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.