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Introduction To Business Organisations

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Introduction To Business Organisations

  1. 1. Introduction to Business Organisations Organisation of Departments
  2. 2. What does an Organisation Chart show? <ul><li>The management structure and main departments of an organisation </li></ul><ul><li>The names and job titles of people within each department </li></ul><ul><li>The relationship between posts </li></ul><ul><li>The reporting structure </li></ul><ul><li>Number of people accountable to each manager </li></ul>
  3. 3. Organisation Chart
  4. 4. Key Terms <ul><li>Organisation Chart – management structure of an organisation shown as a diagram </li></ul><ul><li>Accountability – the duty an employee has to explain his/her decisions </li></ul><ul><li>Authority – the power an employee has to receive and give instructions </li></ul><ul><li>Responsibility – the duty an employee has to carry out a range of tasks </li></ul>
  5. 5. Benefits of Organisation Charts <ul><li>Customers/Visitors can: </li></ul><ul><li>Gain a quick impression of organisation’s size </li></ul><ul><li>Gain a quick impression of the work carried out </li></ul><ul><li>Give idea of who to contact </li></ul>
  6. 6. Benefits of Organisation Charts <ul><li>Employees can: </li></ul><ul><li>See the size and structure of organisation and departments </li></ul><ul><li>View the reporting structures and lines of communication within organisation </li></ul><ul><li>See number of people accountable to senior managers </li></ul><ul><li>See the relationship between departments and managers within organisation </li></ul><ul><li>Know the activities of departments </li></ul>
  7. 7. 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.
  8. 8. Organisation Pyramid Chief Executive Board of Directors Senior Managers Managers Junior Managers Supervisors Assistants
  9. 9. 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
  10. 10. Teamwork in Organisations <ul><li>Everyone has a common goal </li></ul><ul><li>Everyone is committed to realising goal </li></ul><ul><li>Team planning and tactics discussed </li></ul><ul><li>Members pull together </li></ul><ul><li>Members help each other </li></ul><ul><li>Win or lose as a team </li></ul><ul><li>Team greater than sum of their parts </li></ul>
  11. 11. Organisation Structures <ul><li>Organisations can have either a tall or flat structure </li></ul><ul><li>Tall Flat </li></ul>
  12. 12. 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>
  13. 13. 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>
  14. 14. Flat Structures <ul><li>Few levels of management </li></ul><ul><li>Managers have wider spans of control </li></ul>
  15. 15. 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>
  16. 16. Chain of Command <ul><li>Chain of command is the way instructions are passed down from one level of post to another within an organisation </li></ul>Think of the Armed Forces and how orders are passed down by rank from Generals to eventually the Privates.
  17. 17. Line and Lateral Relationships <ul><li>There are two types of relationships within an organisation: </li></ul><ul><li>A Line Relationship exists between a manager and the employees immediately below them, illustrated by vertical lines in an organisation chart </li></ul><ul><li>A Lateral Relationship exists between employees on the same level and report to the same line manager </li></ul>
  18. 18. Key Terms <ul><li>Span of Control – number of employees who report to a superior </li></ul><ul><li>Chain of Command – way instructions are passed down through an organisation </li></ul><ul><li>Line Relationship – relationship between manager and staff directly below them </li></ul><ul><li>Lateral Relationship – relationship between employees on same level of organisation </li></ul>
  19. 19. Organisation Change <ul><li>Growth </li></ul><ul><li>Downsizing </li></ul><ul><li>Delayering </li></ul><ul><li>Outsourcing </li></ul>
  20. 20. Growth <ul><li>What happens? </li></ul><ul><li>Sales of goods/services increases </li></ul><ul><li>More staff employed to meet increased sales </li></ul><ul><li>Organisation may need more floor space </li></ul><ul><li>Effect on Org. Chart </li></ul><ul><li>More staff at various levels </li></ul><ul><li>New departments? </li></ul><ul><li>New specialists? </li></ul><ul><li>More levels of management? </li></ul>
  21. 21. 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>
  22. 22. 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>
  23. 23. Outsourcing <ul><li>What happens? </li></ul><ul><li>Sub-contractors come in to do activities </li></ul><ul><li>Sub-contractors bring their expertise </li></ul><ul><li>Organisation can focus on core activities </li></ul><ul><li>May result from downsizing </li></ul><ul><li>Effect on Org. Chart </li></ul><ul><li>Simpler organisation chart (fewer departments & fewer specialist members of staff) </li></ul>

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