1.4.3 Organisational design Flashcards
Define organisational structure
the way roles and responsibilities within an organisation are structured
What 2 things does the organisational structure show?
-who has authority/power and responsibility
-routes through which communication pass through the business
What 4 factors may impact the organisational structure?
-size of business
-type of business
-management style
-the competitive environment
Why may the size of a business impact the organisational structure?
small = usually flat hierarchal structure
large = tall, complicated, detailed structure
Why may the type of a business impact the organisational structure?
if it operates from 1 location, likely to have a flat structure, whereas if it several likely to have tall
Why may the management styles impact the organisational structure?
an autocratic leadership style will often result in different structures compared with ones designed by a leader who prefers to delegate responsibility
Why may the competitive environment impact the organisational structure?
The structure is often influenced and changed by developments in the market
Define the span of control
The number of subordinates (people directly below) a manager is required to supervise directly
What is a narrow span of control?
where a single manager or supervisor oversees a few subordinates which leads to a tall structure
What is a wide span of control?
where a single manager or supervisor oversees a large number of subordinates which leads to a flat structure
Give a strength and limitation of a narrow span of control
A- fast communication and decision-making
D- higher costs as theres more higher wages to pay
Give a strength and limitation of a wide span of control
A- more delegation of authority
D- staff feel demotivated as fewer managers overseeing a higher number of people
What is a chain of command
the different levels of command within an organization
(number of levels communication goes through from bottom to top or top to bottom)
What are levels of heirarchy
number of layers within an organization
give characteristics of a tall structure
-Many layers of hierarchy and narrow spans of control
Give a strength and a limitation of a tall structure
A- More opportunities for promotion, increased motivation
D- More layers, more staff, higher cost
communication takes longer to pass through
what are key characteristics of a flat structure?
-Few layers of heiarchy with a wide span of control where delegation is encouraged
Give a strength and a limitation of a flat structure
A- Increased employee empowerment as they often have more autonomy and responsibility leading to higher job satisfaction and motivation
D- Decision-making may become slower if theres no clear authority. This could potentially lead to hindering responsiveness to changes
What is a matrix structure?
People from diff departments (eg. marketing and HR) come together to work on a project
-Individuals work across teams and projects as well as in their own department
Give an advantage and disadvantage of the matrix structure
Employees can be shared across multiple projects, optimizing the use of skills and expertise. This can lead to efficient projects
D- Multiple managers involved so theres a risk of disagreements and power struggles leading to stress and decreased job satisfaction
Give 3 reasons businesses may change their structure
-To reduce long-term cost
-To widen a structure because of growth
-To improve customer service
What may be challenges to businesses changing their structure?
-Short-term costs from redundancies
-Disruption and demotivation from staff retention
define delayering
Removing layers of management from the hierarchy- to cut costs
(usually, remove top layers)
Give a strength and a limitation of delayering
A- lower labor costs
D- Remaining managers may find themself overloaded with responsibility as theres now decreased management layers which may cause them to burnout
Define delegation
The assignment to others of the authority for particular functions, tasks and decisions
Give a strength and a limitation of delegation
A- Subordinates may feel motivated which may increase productivity
D- Quality of work depends on the experience of subordinates
Define employee empowerment
Giving employees the authority, resources and autonomy to be able to make decisions and do their job
Give a strength and a limitation of employee empowerment
A- increased job satisfaction as staff feel more valued which can increase productivity
D- Risk of employees making poor decisions which may jeopardise business
Define centralisation
Where the decision-making within a business is made firmly at the top of the hierarchy amongst the most senior management
Give an advantage and a disadvantage of centralisation
A- usually faster decision meaning theyre able to adapt swiftly to changing circumstances
D- reduced employee motivation as their opinions are not considered and there may be a larger gap between them and their managers
Define decentralisation.
Where decision making within a business is spread out including more junior managers in their hierarchy
(gives more authority to individual stores)
Give an advantage and a disadvantage of decentralisation
A- decisions are made closer to the customer so more likely to target their specific needs
D- diseconomies of scale (price per product inc)
- Maintaining multiple decision-making centers can lead to higher administrative costs, as each unit may require its own management structure and resources.
Why is structure important?
to meet the company’s objectives
