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Standard Grade Administration - Organisational Structure


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Standard Grade Administration - Organisational Structure

  1. 1. Introduction to Business Organisations Organisation of Departments Standard Grade Administration
  2. 2. An Organisation Chart is used to show the structure of an organisation. An example is shown here: ORGANISATION CHARTS
  3. 3.   <ul><li>What Does An Organisation Chart Show? </li></ul><ul><li>  </li></ul><ul><li>The management structure and main departments within an organisation </li></ul><ul><li>The relationship between departments </li></ul><ul><li>The reporting structure </li></ul><ul><li>The span of control of each employee (the number of people a person has responsibility for) </li></ul><ul><li>Who Would Use An Organisation Chart? </li></ul><ul><li>  </li></ul><ul><li>Visitors to the organisation </li></ul><ul><li>New members of staff </li></ul><ul><li>Receptionist </li></ul>
  4. 4. <ul><li>ADVANTAGES OF ORGANISATION CHARTS </li></ul><ul><li>Customers or visitors to a firm can gain an immediate impression of the overall size of an organisation </li></ul><ul><li>Employees can see at a glance who reports to who </li></ul><ul><li>Employees can see who they are responsible for </li></ul><ul><li>Useful for new employees to get a feeling for the whole business </li></ul><ul><li>DISADVANTAGES OF ORGANISATION CHARTS </li></ul><ul><li>Information in an organisation chart will be out of date if employees leave the firm or new employees join. </li></ul>
  5. 5. What information does an organisation chart show? <ul><li>An organisation chart shows the positions </li></ul><ul><li>of employees within the organisation – their names, room number, telephone extension number etc </li></ul><ul><li>It also shows: </li></ul><ul><li>LEVELS OF RESPONSIBILITY </li></ul><ul><li>LINES OF COMMUNICATION </li></ul><ul><li>  LINES OF RESPONSIBILITY (LINE RELATIONSHIPS) </li></ul><ul><li>LATERAL RELATIONSHIPS </li></ul>
  7. 7. LINES OF COMMUNICATION Organisations must communicate information efficiently and effectively in order for it to survive and grow If there are many levels within the organisation there is more chance of communication breaking down as information is handled by more people The chain of command shown is: Board of Directors Managing Director Sales Director Sales Manager Board of Directors Managing Director Sales Director Sales Manager
  8. 8. LINES OF RESPONSIBILITY These show people in the organisation who are in charge of the work of other members of staff. Line Relationships These exist between line managers and the staff immediately below them. Members of staff are accountable to their line manager for any actions decisions they take. Line relationships are shown by VERTICAL lines on an organisation chart. The Sales Director is in charge of the work carried out by both the Sales Manager and Marketing Manager A line relationship exists between the Sales Director and the Marketing Manager in the above example Sales Director Sales Manager Marketing Manager
  9. 9. LATERAL RELATIONSHIPS These exist between employees who are on the same level and who report to the same line manager. The employees CANNOT give instructions to each other. Lateral relationships are shown by HORIZONTAL lines on an organisation chart. A lateral relationship exists between the Sales Manager, the Finance Manager and the Personnel Manager. They are all on the same level of responsibility, they all report to the same manager and neither can give the others orders. Personnel Manager Finance Manager Managing Director Sales Manager
  10. 10. Organisational Structure
  11. 11. <ul><li>There are 2 main types of organisational structure </li></ul><ul><li>TALL </li></ul><ul><li>FLAT </li></ul><ul><li>FLAT ORGANISATIONS </li></ul><ul><li>Few levels of management </li></ul><ul><li>Managers have wider span of control </li></ul><ul><li>TALL ORGANISATIONS </li></ul><ul><li>Many levels of management </li></ul><ul><li>Managers have narrow span of control </li></ul>
  12. 12. TALL <ul><li>Examples of Tall Organisations </li></ul><ul><li>Police Force </li></ul><ul><li>Army </li></ul><ul><li>School </li></ul><ul><li>It may take longer to communicate decisions and information throughout the organisation </li></ul><ul><li>The management structure may be costly due to many highly paid jobs </li></ul><ul><li>Employees may not the opportunity to suggest ideas or show initiative </li></ul><ul><li>Easier for managers to supervise staff </li></ul><ul><li>More opportunity for promotion </li></ul><ul><li>Employees more likely to know their immediate boss </li></ul>Disadvantages Advantages
  13. 13. <ul><li>Examples of Flat Organisations </li></ul><ul><li>Small Shops eg Newsagent, Chip Shop </li></ul><ul><li>Small Offices </li></ul><ul><li>Farms </li></ul>FLAT <ul><li>Employees may become more stressed due to increased workload </li></ul><ul><li>Increase in amount of training needed – due to employees wider responsibilities </li></ul><ul><li>Fewer opportunities for promotion to management posts </li></ul><ul><li>Employees have more responsibility – should result in staff feeling valued/motivated </li></ul><ul><li>Fewer levels of management – more efficient communication </li></ul><ul><li>Employees more likely to be involved in decision making process </li></ul>Disadvantages Advantages
  14. 14. Changing the organisational structure Organisations are unlikely to remain the same year after year. The business may be growing in size or it may have to reduce its operations. <ul><li>METHODS OF RESTRUCTURING </li></ul><ul><li>Growth – the organisation is becoming larger. More staff are employed by the organisation. New departments may need to be created. </li></ul><ul><li>Downsizing – the organisation has to make cut backs without reducing output – some staff may be made redundant, others will find themselves with increased responsibilities. </li></ul><ul><li> Delayering – the organisation removes certain levels of management. This results in managers having wider spans of control and the organisation having a flatter structure </li></ul>
  15. 15. What are the benefits and problems of restructuring? <ul><li>Low staff morale through redundancies, increased workload etc </li></ul><ul><li>Staff may not like the new structure and want things to stay the same </li></ul><ul><li>Costs of restructuring – associated with moving to new departments </li></ul><ul><li>Customers may be unfamiliar with the new structure </li></ul><ul><li>Reduction in costs – staffing costs, general running costs (Delayering & Downsizing) </li></ul><ul><li>To become more efficient </li></ul><ul><li>To improve communication within the organisation (Delayering) </li></ul>Possible problems Possible Benefits