Organisational Structures


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Organisational Structures

  1. 1. Organisational Structures AS Business Unit 2
  2. 2. Aims <ul><li>Be able to define the different types of organisational structure, delayering and span of control </li></ul><ul><li>Be able to create an organisational structure and describe job roles given </li></ul><ul><li>Be able to relate organisational structures to business examples </li></ul>
  3. 3. Organisational Structures <ul><li>An organisational chart sets out the way in which a business is arranged to complete its activities </li></ul><ul><li>Set out as an Organisational Chart, it sets out: </li></ul><ul><li>The lines of communication </li></ul><ul><li>Who has responsibility within the organisation </li></ul><ul><li>The roles and titles of the employees </li></ul><ul><li>The people employees are accountable to and responsible for </li></ul>
  4. 4. A Simple Organisational Chart Chairman , Directors of various departments Managers Supervisors / Team Leaders Production Operative / Support Staff Accountability Authority may be delegated
  5. 5. Workloads and Job Allocation <ul><li>Fundamental decision of managers: who does what job(s)and how much work can be reasonably expected of one person </li></ul><ul><li>Cost effective? </li></ul><ul><li>As a small business grows, more staff need to be employed so that the entrepreneur can concentrate on managing the enterprise </li></ul><ul><li>Using staff time fully is a way of cutting costs, workloads must be ‘optimum’ to save money on wages </li></ul>
  6. 6. Levels of Hierarchy <ul><li>Organisations with a large number of layers of hierarchy are called ‘tall’ </li></ul>There are a lot of people in between the top of the organisation and the bottom. There is a long chain of command Chairman Shop Floor Worker
  7. 7. Flat Organisational Structures A ‘flat’ organisational structure has few levels of hierarchy and a wide span of control Managing Director Shop Floor Workers Why is it beneficial for junior staff to work in a flat organisation?
  8. 8. Matrix Structures Project A Manager Production Staff Marketing Staff H.R. Staff Finance Staff Project B Manager Production Staff Marketing Staff H.R. Staff Finance Staff Project C Manager Production Staff Marketing Staff H.R. Staff Finance Staff Project D Manager Production Staff Marketing Staff H.R. Staff Finance Staff Chief Executive Production Marketing Human Resources Finance
  9. 9. Matrix Structures <ul><li>Task Orientated </li></ul><ul><li>Vertical chain of command from managers and superiors </li></ul><ul><li>Horizontal organisation of project or product teams </li></ul><ul><li>Used to develop teams of individuals with specialist skills </li></ul>
  10. 10. Spans of Control Manager A has a span of control of two Supervisor B has the widest span of control Manager A Supervisor B Supervisor C Worker D Worker E Worker F Worker G Worker H
  11. 11. Spans of Control <ul><li>A narrow span of control allows team leaders to keep closer control over the activities of the employees that they have responsibility over </li></ul><ul><li>As the span of control widens, the worker is likely to have more independence </li></ul><ul><li>The traditional view is that the span of control should not exceed six </li></ul><ul><li>Realistically, where employees do a similar job it can reach twelve </li></ul>
  12. 12. Delayering / Downsizing <ul><li>Delayering occurs when businesses remove one or more layers of hierarchy from the organisation </li></ul><ul><li>Over the past 10 – 20 years many companies have implemented large scale delayering programmes </li></ul><ul><li>Many middle managers have been removed </li></ul>
  13. 13. Advantages of delayering <ul><li>Delayering reduces costs by removing a number of expensive middle managers </li></ul><ul><li>Motivate employees lower down by giving them more empowerment </li></ul><ul><li>Communication may improve as the number of layers decreases </li></ul>
  14. 14. Disadvantages of Delayering <ul><li>Delayering can lessen organisational performance as valuable knowledge and experience may be lost </li></ul><ul><li>Morale and Motivation may suffer </li></ul><ul><li>Higher workloads may lead to stress and job dissatisfaction </li></ul>
  15. 15. Adjusting the Organisational Structure <ul><li>The growth of the business </li></ul><ul><li>Market conditions </li></ul><ul><li>Ownership </li></ul><ul><li>Customers needs </li></ul><ul><li>The entrepreneurial culture within the company </li></ul>
  16. 16. Recap <ul><li>Can you think of a business that is likely to have a hierarchical organisational structure? </li></ul><ul><li>Can you think of a business that is likely to have a flat organisational structure? </li></ul><ul><li>Name two advantages and disadvantages of a flat organisational structure. </li></ul><ul><li>What is an advantage of delayering? </li></ul><ul><li>Define Span of Control </li></ul>