Standard Grade Administration Unit 1a Organisations of Departments
What is an Organisation Chart?
An Organisation Chart is used to show the structure of a business.
An example is shown below:
Mr Smith Managing Director Miss Jones Finance Manager Miss Murphy Sales Manager Miss Jackson Marketing Assistant Mr McPherson Accounts Assistant Miss Simpson Purchases Manager Miss Brown Buyer Mr Spacey Human Resources Manager Mr Philip Training Officer
What does an Organisation Chart Show?
The management structure of the organisation.
The relationship between departments.
The reporting structure of the organisation.
The Span of Control: The number of staff a manager has the responsibility for .
Who would use an Organisation Chart?
Visitors to an Organisation
New members of staff
Advantages of an Organisation Chart
Employees can see who they are responsible for
Employees can see who they report to
Customers or visitors can gain an immediate impression of the company
New employees can get an overall feeling for the organisation.
Disadvantages of an Organisation Chart
The chart can quickly become out of date as employees start and leave the company.
It can be difficult to understand if it contains too much information.
An organisation chart may not be big enough to show all of the employees in a large organisation.
What information does an organisation chart show?
Span of Control: How many people a manager directly supervises.
Chain of Command: This shows who is responsible for who and how instructions are passed down the organisation.
Levels of Responsibility: This is the employee’s position within the organisation. The further up the “Chain of Command” the greater the responsibility.
Authority: How much power an employee has in the organisation.
Line Relationships: Shows the direct link between a supervisor and an employee.
Lateral Relationships: Describes the relationship between employees at the same level in the same department.
Organisation Chart – Example
An Organisation Chart
will also show all of
the positions of
employee’s within the
Organisation. It will
give their names,
and often a photograph.
Mr Smith Managing Director Room: 101 Ext: 007
Lines of Communication
Organisations must communicate their
information effectively and efficiently in
order to survive and grow.
When an organisation has many
levels there is more chance of
communication breaking down as
information is handled by more
The Chain of Command shows who is
in charge of who. The higher an
employee is within the organisation the
greater the responsibility they
The Chain of Command shown opposite is
Managing Director Finance Manager Accounts Assistant
Line Relationships exist between line managers and staff directly below them. Staff always
report to their line manager directly with and problems they may have.
E.g. Miss Murphy and Miss Jackson have a Line Relationship.
Miss Murphy Sales Manager Miss Jackson Marketing Assistant
Lateral Relationships A lateral relationship describes the relationship of employees who are at the same level and report to the same line manager. A lateral relationships are shown by HORIZONTAL lines on an organisation chart. E.g. Miss Jones, Mr Murphy, Miss Simpson and Mr Spacey have a Lateral Relationship. They have the same level of responsibility and cannot give each other an order. Mr Smith Managing Director Miss Jones Finance Manager Miss Murphy Sales Manager Miss Simpson Purchases Manager Mr Spacey Human Resources Manager
There are 2 main types of Organisational
Many levels of management
Managers has a narrow Span of Control.
Fewer levels of management
Managers have a wider Span of Control.
M.D. Team Leader Production Manager Office Manager Office Junior M.D. ProductionManager Assistant
Examples of Tall Organisations are:
Easier for managers to supervise staff.
More promotion opportunities.
Employees will know their immediate boss personally.
It will take longer to announce decisions in the organisation.
Employees may not get the chance to use initiative or initiate their own ideas.
It may be costly to pay all the levels of management meaning less money being spent on staff wages and bonus.
M.D. Team Leader Production Manager Office Manager Office Junior
Examples of Flat Organisations are:
Employees have more responsibility making them feel more motivated.
Employees are involved in decision making.
More efficient communication as there are less levels of management .
Increased workload for employees can cause stress.
Fewer management opportunities.
Wider responsibilities may require additional training which can be costly.
M.D. ProductionManager Assistant
Changing the Organisational Structure
A organisational structure may change in
many ways. The main ways this can
This occurs when the organisation has been
successful and decides to expand. They will
employ more people, produce more products and may move to larger premises.
This occurs when the organisation becomes smaller.
staff are made redundant in order for the organisation
to reduce costs to make the organisation more
efficient. Other staff may have to take on addition
This occurs when the organisation feels their current
structure is no longer working very well. This will
result n managers having a wider Span of Control and
employees taking on more responsibility.
This occurs when the organisation wants to
concentrate on its CORE activities instead of undertaking certain activities. In this case an organisation will sell their activities to another company.
For example , a company may decide that instead of doing their own accounts they will outsource them to an accounting firm.
Centralisation of Departmental Function
This will happen certain activities that are undertaken
in all departments are centralised in one department.
For example, the administrative function may be
centralised by moving all of the administration
assistants from each functional department to a
Decentralisation of Departmental Function
This occurs when one department closes and the staff