WHAT IS IT?
Organisational structure is a pattern or
arrangement of jobs and groups of jobs
within an organisation.
An organisational chart shows the way in which
the chain of command works within the
WHY IS IT USED?
It is important for decision making, and the
easy running of a business organisation.
This structure describes the levels and status of the people within the business
organisation.It is common for larger and more complex companies which
involves a lot of work and management.
It is easy to see the different groups ; how many are there and how they
relate to other people in the system.
People get a clear sense of who they report to and who they supervise.
Jealousy between employees when one get promoted.
Communications between employees and other staff could get
It can give to much power to the people at the top of the chart and this can
lead to corruption.
Flat organisational structure are common in small business organisations. In
this type of structure, there are fewer managing levels and small companies
use this type of structure because of a lack of manpower.
Small companies with flat organistaional structures communicate easily with
employees at all levels.
During decision making, it involves almost all of the employees which helps to
get the feedback of every employee.
The flat structure adapt better to changes. Eg: Faster communication makes
Managers will have more work to do, as the number of managers are less.
It may not be suitable for complex activity.
The quality of performance may be bad.
This structure has many levels of hierarchy, there are many managers. Each
manager is in charge of a small group of people.
There is only a small number of employees so the managers can supervise
more closely and spend more time on training the employees.
The communication between managers and employees are clear
It can be difficult to make decisions because the communication is clear.
Slow decision making which can lead to the company being less competitive
and it faces higher costs than other types of business structure.
This organisational structure is where people with similar skills are
pooled together. It consists of more than one manager.
Individuals can be chosen according to the needs of the project.
These structures are based upon the different divisions of the organisation
and can be classified into the following ;
Product structure: a product structure is when the employees and their
work are based on the different types of products produced. Eg: if a
company produces three different types of products, they will have
three different divisions for these products.
Market structure: This structure is used to group employees on the basis
of specific market the company sells in.
Geographic structure: This structure is based on the different locations of
the company. For example there could be a north zone, south zone, east
and west zone.
Chain of command is the order in which
authority and power is delegated from top
management to every employee at every level of
The more clear the chain of command is, the
more effective the decision making and
eg: Military forces are an example of straight
chain of command.
A span of control is the number of people that report back to one
manager in a hierarchy. The more people under the control of
one manager, the wider the span of control is.
the two types of span of control are :
Wide span of control
The span of control depends on the type of product being made
(products which are easier to make and deliver need less
supervision and so can have a wider span of control) and the
skills of managers and workers (a more skillful workforce can
work with a wider span of control as they require less
Narrow span of control
requires It requires a higher level of management skill to control
a greater number of employees, so there is less management skill