2.2 - Organisation structure Flashcards
Organisational structures
Arrange employees in order to show the following information at glance:
* job titles
* accountability
* responsibility
Adopted for more efficient function
Delegation
The passing on of control and authority to others in a firm
* essential: business owners are unable to effectively control all aspects of the firm
Span of control
The number of people directly accountable to a manager
* typically, greater seniority = greater span of control
Levels of hierarchy
Refers to organisation based on ranking system
* most skilled/senior employees will appear at the top
* least senior employees at the bottom
Chain of command
The formal line of authority through which orders are passed down in an organisation
Bureaucracy
The execution of tasks that are governed by official administrative and formal rules of a firm
Drawbacks of bureaucracy (name 2)
- reqirements to fill out unnecessary paperwork
- long official chains of command
- too many committees set up to investigate issues
- managers will duplicate roles and responsibilities
Centralisation
Structures that have a very small number of people at the top who control the decision-making
Advantages of centralisation (name 2)
- rapid decision-making
- better control
- better sense of direction
- efficiency
Disadvantages of centralisation (name 2)
- added pressure/stress for senior staff
- inflexibility
- possible delays in decision making
- demotivating
Decentralisation
Structures have decision-making authority and responsibility shared with a greater number of people
Advantages of decentralisation (name 2)
- input from the workforce
- speedier decision-making
- improved morale
- improved accountability
- teamwork
Disadvantages of decentralisation (name 2)
- costly
- inefficient
- greater chance of mistakes
- loss of control
- communication issues
Delayering
The process of removing one or more levels in the hierarchy. Designed to:
* widen the span of control at each level
* shorten the chain of command
Advantages of delayering (name 2)
- reduced costs
- imporved speed of communciation
- encourages delegation and empowerement
Disadvantages of delayering (name 2)
- creates anxiety and sense of insecurity
- overloads staff
- decision-making can take longer
Matrix structures
Organise employees from different departments to temporarily work together on a particular project
* temporary opportunity to work with colleagues from other deparments
Advantages of matrix structures (name 1)
- improved communication
- maximises skills set of the workforce
- cost-effective
Disadvantages of matrix structures (name 1)
- added workloads
- difficult to coordinate
- time consuming
Types of organisation charts (3)
- flat or horizontal
- tall or vertical
- by product, by function or by region
Advantages of flat structures (name 2)
- increased opportunities for career development due to importance of delegation
- improved communication due to fewer layers
- cheaper to operate
- reduces power distance
Advantages of tall structures (name 2)
- quicker and more effective communication
- easier to control and manage
- increased efficiency and productivity due to specialisation of labour
- greater opportunities for promotion
Two characteristics of a flat organisational structure
- fewer levels in the hierarchy
- wider span of control
Two characteristics of tall organisational structures
- many levels of hierarchy
- narrower span of control
Organisation by product, function and region
A clear designation of roles towards very specific areas by the representation of its characteristics across the layers of the structure
Organisation restructuring
The reorganising of human resources of a firm into a new organisational structure
* occurs when there is a need for change in order to remain competitive in a changing environment
Reasons for restructuring a firm (name 3)
- to incorporate new job roles and eliminate redundant roles
- reduce costs/debt
- concentrate on key business activities
- incorporate new technology
- ensure skills and expetise of employees are used effectively
- merge with another company
