Specification Detail Organisational structure: the importance of divisional structure, levels of hierarchy, chains of command and centralised v decentralised systems
Why Do Businesses Need to be Organised? As a business gets bigger it needs to be organised The structure determines: Who is responsible for what job and Who is responsible to whom
Organisational structure There are 3 main types of organisational structure: Tall or Hierarchy Flat Matrix
Forms of Organisational Structure Board Of Directors Managing Director Directors Managers Supervisors Workers Hierarchy/Tall structure
Forms of Organisational Structure Owners Managers Workers Flat structure
Forms of Organisational Structure RESPONSIBILITY & AUTHORITY RESPONSIBILITY & AUTHORITY RESPONSIBILITY & AUTHORITY Support R&D Transport Services BOD Finance Production MD HRM Managing Sales RESPONSIBILITY & AUTHORITY Matrix structure
Organisational chart A _________ which shows the _________ structure of an ______________Diagram Internal Organisation
Forms of Organisational Structure Board of Directors Managing Director Finance H. Resources Production Marketing Logistics Director Director Director Director DirectorFinance H. Resources Production Marketing LogisticsManager Manager Manager Manager ManagerStaff Staff Staff Staff Staff Staff Staff Staff Staff Staff Tall/Hierarchy structure
Forms of Organisational Structure OwnersFinance H. Resources Production Marketing LogisticsManager Manager Manager Manager ManagerStaff Staff Staff Staff Staff Staff Staff Staff Staff Staff Flat structure
Chain of Command Line on which orders and decisions are passed down From top of hierarchy to bottom Managing • The longer the chain the more Director complex communication is. Production Messages get lost Director Production • Operators/workers may not feel Manager involved in decisions Factory • May be hard for company to Supervisor change as more groups to resist Machine changes Operators
Advantages & Disadvantages A d v a n t a g e s DisadvantagesHierarchal Large organisations, usually secure Communication is slowStructure Lines of communication clear Long chain of command Flat Communication faster Needs all levels to functionStructure Short chain of command Reduced line of authority Matrix Communication very fast No defined chain of commandStructure Encourages teamwork No defined line of authority
Organisational Structures: Summary QuestionsKey questions:1. What are the 3 main types of organisational structure?2. What is an organisational chart?3. What is the chain of command?4. Why do businesses have different types of structures?
Which best matchescentralised / decentralised?
TASK: Put the following statements into a chart describing advantages and disadvantages of decentralisation and centralisation CentralisationAdvantage Disadvantage Decentralisation Advantage Disadvantage
Centralised OrganisationsAdvantages Disadvantages Lack of motivation Tight control of for managers decisions Central Decisions made management may by senior be “out of touch” management Slow to make Decisions are decisions consistent
De-CentralisedOrganisationsAdvantages Disadvantages Increased Managers may lack motivation of experience managers Local decisions may Encourages local be inconsistent with initiatives the overall business Decisions based on aims and objectives more up-to-date Duplication of information functions and costs Decisions made quicker