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Internal Organisation Int 2

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Internal Organisation Int 2

  1. 1. Internal Organisation Int 2 Business Management
  2. 2. What is an organisation? <ul><li>A group of people working towards a defined set of goals and objectives. </li></ul>
  3. 3. Functional Grouping <ul><li>Departments where staff have similar skills & expertise, and do similar jobs. </li></ul><ul><li>Functional grouping usually consists of marketing, finance, human resources and operations. </li></ul><ul><li>What other functional areas might there be? </li></ul>
  4. 4. Functional Grouping Production Marketing Accounts Human Resources IT Board of Directors Chief Executive
  5. 5. Functional Groupings +/- <ul><li>Advantages </li></ul><ul><li>Staff with similar skills kept together </li></ul><ul><li>Allows specialisation </li></ul><ul><li>Clear organisational structure </li></ul><ul><li>Staff know formal relationships </li></ul><ul><li>Disadvantages </li></ul><ul><li>Organisation may become too large </li></ul><ul><li>May be unresponsive to change </li></ul><ul><li>Departmental competition may emerge </li></ul><ul><li>Departments may put own interests before organisation’s </li></ul>
  6. 6. 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.
  7. 7. Organisation Pyramid Chief Executive Board of Directors Senior Managers Managers Junior Managers Supervisors Assistants
  8. 8. 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
  9. 9. Hierarchical Structures <ul><li>Hierarchical structures can either a tall or flat structure </li></ul><ul><li>Tall Flat </li></ul>
  10. 10. 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><ul><li>Clearly defined roles </li></ul>
  11. 11. 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>
  12. 12. Flat Structures <ul><li>Few levels of management </li></ul><ul><li>Managers have wider spans of control </li></ul><ul><li>Faster communications </li></ul><ul><li>Quicker decision-making </li></ul>
  13. 13. 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>
  14. 14. Factors Affecting Organisation Structure <ul><li>Size of organisation </li></ul><ul><li>Technology used </li></ul><ul><li>Market firm operates in </li></ul><ul><li>Staff skills within organisation </li></ul><ul><li>Products/services made or supplied by organisation </li></ul>
  15. 15. Definitions <ul><li>Line relationships – exist when a member of staff is in charge of another member of staff </li></ul><ul><li>Functional relationships - exist with people on the same level of management </li></ul><ul><li>Staff Relationships – exist with people who have skills which support the firm as a whole rather than individual departments </li></ul><ul><li>Informal Relationships – exist as friendships between workers who may have no formal contact in the workplace. </li></ul>
  16. 16. Delayering <ul><li>What happens? </li></ul><ul><li>Levels of management are reduced (move from tall to flat structure) </li></ul><ul><li>Wider spans of control </li></ul><ul><li>Savings in management wages </li></ul><ul><li>Effect on Org. Chart </li></ul><ul><li>Flatter structure </li></ul><ul><li>Fewer management posts </li></ul><ul><li>Increased worker responsibilities </li></ul>
  17. 17. Downsizing <ul><li>What happens? </li></ul><ul><li>Staff ‘laid-off’ </li></ul><ul><li>Wages (labour costs) are reduced </li></ul><ul><li>Effect on Org. Chart </li></ul><ul><li>Greater workload for departments </li></ul><ul><li>Some posts will disappear </li></ul><ul><li>Workers have more duties </li></ul>

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