Unit 1.3 Slides

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Unit 1.3 Slides

  1. 1. Unit 1.3 How are Businesses Organised?
  2. 2. Organisation Chart
  3. 3. Line Relationships <ul><li>A Line Relationship exists between a manager and the employees immediately below them, illustrated by vertical lines in an organisation chart </li></ul>
  4. 4. Levels of Management This is how we would normally see an organisation structure. This is an organisation chart of a business. There is another way we can view the same organisation.
  5. 5. Organisation Pyramid Chief Executive Board of Directors Senior Managers Managers Junior Managers Supervisors Assistants
  6. 6. Span of Control <ul><li>Span of Control means the number of people who report to a manager </li></ul>Narrow span of control Wide span of control Employees Employees Manager Manager
  7. 7. Organisation Structures <ul><li>Organisations can have either a tall or flat structure </li></ul><ul><li>Tall Flat </li></ul>
  8. 8. Tall Structures <ul><li>Many levels of management </li></ul><ul><li>Managers will have narrow span of control </li></ul><ul><li>Management posts usually specialised </li></ul>
  9. 9. Cost/Benefit Analysis of Tall Structures <ul><li>Benefits </li></ul><ul><li>Easier for managers to supervise staff </li></ul><ul><li>More promotion opportunities </li></ul><ul><li>Employees will know immediate boss </li></ul><ul><li>Clear lines of responsibility and communication </li></ul><ul><li>Costs </li></ul><ul><li>Many layers of communication </li></ul><ul><li>Slow decision-making </li></ul><ul><li>High labour costs due to many levels of management </li></ul><ul><li>Workers may have little freedom or responsibility </li></ul>
  10. 10. Flat Structures <ul><li>Few levels of management </li></ul><ul><li>Managers have wider spans of control </li></ul>
  11. 11. Cost/Benefit Analysis of Flat Structures <ul><li>Benefits </li></ul><ul><li>Employees have more authority and responsibility </li></ul><ul><li>Better communication between managers and workforce </li></ul><ul><li>Decision-making is quicker </li></ul><ul><li>Communication channels less complicated </li></ul><ul><li>Better team spirit </li></ul><ul><li>Costs </li></ul><ul><li>Employees have greater workload </li></ul><ul><li>Employees may need training for multi-tasks </li></ul><ul><li>Fewer promotion opportunities </li></ul><ul><li>If span of control is too wide people may feel isolated or ignored </li></ul>
  12. 12. Functional Areas of Business <ul><li>Marketing </li></ul><ul><li>Human Resources </li></ul><ul><li>Operations </li></ul><ul><li>Finance </li></ul>
  13. 13. Marketing <ul><li>Market research </li></ul><ul><li>Product development </li></ul><ul><li>Branding </li></ul><ul><li>Advertising and promotion </li></ul><ul><li>Sales </li></ul>
  14. 14. Human Resources <ul><li>Recruitment </li></ul><ul><li>Training </li></ul><ul><li>Industrial relations </li></ul><ul><li>Management styles </li></ul><ul><li>organisation </li></ul>
  15. 15. Operations <ul><li>Designing </li></ul><ul><li>Production </li></ul><ul><li>Stock Control </li></ul><ul><li>Distribution </li></ul>
  16. 16. Finance <ul><li>Raising finance </li></ul><ul><li>Budgeting </li></ul><ul><li>Cash flow </li></ul><ul><li>Final accounts </li></ul><ul><li>Ratio analysis </li></ul>
  17. 17. Other Departments <ul><li>IT </li></ul><ul><li>Administration </li></ul><ul><li>R & D </li></ul>
  18. 18. Functional Relationships between Departments <ul><li>A Functional Relationship exists when one department offers direct services to other departments </li></ul><ul><li>Human Resources deals with recruitment and training for the entire organisation </li></ul><ul><li>Administration offers phone calls, meetings and secretarial support to the other departments </li></ul>
  19. 19. Responsibility and Authority <ul><li>Responsibility means being answerable for one’s own actions and decisions </li></ul><ul><li>Authority means having the power to take action, make decisions and delegate to others </li></ul>

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