2.2 - Organisational structure Flashcards
Levels of hierarchy
How many levels of responsibility are in a business. Each level indicates a level of seniority in the business.
Line managers
People who have the authority to make decisions and who bear responsibly for the outcomes of those decisions
Staff manager
Someone with the authority to communicate a decision made by the CEO without the responsibility for that decision
Chain of command
Traditionally, decisions travel from the top of the organisation downwards and are therefore often referred t was commands.
Span of control
Refers to how many subordinates are directly under the authority of a manger and whom managers are responsible for.
Delegation - What it is and span of control
Occurs when a manager gives authority for a particular decision but not the responsibility for the outcome of that decision.
More likely the note span of control is wide.
A narrow span of control will keep a tighter control on all decisions
Centralisation - What it is, level of hierarchy, delegation and type of leadership
A high degree of centralisation indicates the tall major decision making is maintained within a small group of managers operating close to the head of the business
Usually with businesses that have many levels of hierarchy and narrow spans of control
Delegation rarely happens and leadership is usually autocratic
Decentralisation - What it is, level of hierarchy, delegation and type of leadership
Senior managers may maintain core strategic decisions, but other decision making authority is delegated to middle managers.
Usually with businesses that have fewer levels of hierarchy and wider spans of control
Delegation is more likely to happen and leadership is likely to be democratic
Bureaucracy - What it is, delegation and levels of hierarchy
Any administrative system. An organisation with many rules and procedure and set ways of doing things.
Personal initiative, flexible thinking and delegation are not expected
Expected to have many levels of hierarchy
De-layering
Occurs when a business reduces the levels of hierarchy by removing layers of management.
Used to reduce bureaucracy and increase the decision making capability of middle managers.
Reduces costs
Tall organisational structure
Many levels of hierarchy
Narrow spans of control
centralised decision making
long chains of command
Autocratic leadership
Limited delegation
Flat organisational structure
Few levels of hierarchy
Wider spans of control
Decentralised decision making
Shorter chains of command
Democratic leadership
Increased delegation
4 types of ways organisational structures can be presented
Hierarchy
Function
Product
Region
Project based organisation
Designed to be more flexible and responsive to market demands
Project managers run teams of employees focusing on individual projects
Team splits and reassembles when project complete
No interaction between team projects
Common in construction
Shamrock organisations
3 main groups of staff
Core staff (full time) eg: Managers, technicians Must be well compensated and have job security E-commerce and teleworking have reduced core staff – implies downsizing
Peripheral workers (part time, contractual)
Employed only when required
Less job security and morale but offer more flexibility
Outsourced workers (subcontracting) Paid to do specialized tasks
Advantages of delayering
Reduce costs
Improve speed of communication
Encourage delegation
Increases motivation - less remoteness form management and more likely for more responsibility
Disadvantages of delayering
Can cause job insecurity, demotion, redundancy
Overstretching of employees
Costs to train employees
Advantages of bureaucracy
Authority and levels of responsibility are obvious
Standardisation of processes to ensure efficiency
Turns employees into specialists rather than generalists
Loyalty to department
Disadvantages of bureaucracy
May stifle creativity
Rivalries between departments may ensue
Less job satisfaction; high labor turnover
Slow decision-making process
Salaries for the different layers of management increases costs
Red tape
Advantages of centralisation
Rapid decision making on single projects
Better control over all company activity
Better sense of direction
Suited for smaller businesses
Decisions are more consistent
Disadvantages of centralisation
Slow decision making on multiple projects
Stress for senior staff
Inflexible
Demotivating
Exclusion of other people’s ideas that may be better
Advantages of decentralisation
Input from employees
Speedier decision making
Improved Morale
Accountability
Teamwork
Disadvantages of decentralisation
No control
Greater chance of mistakes
Reliance on communication
Redundancy
Lower standards of work (no governing body)
Inconsistency between company goals (regional managers)
Factors affecting decision to have a centralised or decentralised structure
Size of organisation
Scale of importance of decision
Level of risk
Corporate culture
Management attitude and competencies
ICT
Delegation Checklist (SMARTER)
Specific – tasks clearly defined
Measurable – quantifiable results
Agree – on amount of power and freedom
Realistic – depends on the ability to carry out the task
Time Bound – task completion
Ethical – tasks fairly delegated
Recorded – documented
Effectiveness of communication depends on:
Clarity of the message
Medium used (ie. e-mail, telephone, letter, face to face)
Ability of receiver to decode message
How can cultural differences affect communication?
Preference for oral communication, use of body language, directness of language used
Informal/unofficial communication channels may also emerge
How can formal verbal communication occur?
Interviews
Meetings
Lectures
Presentations
Telephone converstations
How can informal verbal communication occur?
Face to face conversations
Gossiping
Telephone converstations
Advantages of verbal communication
Quick, direct and effective
Immediate feedback
Disadvantages of verbal communication
Message can be misunderstood if sender uses:
Wrong language, does not speak clearly, does not allow for feedback
Advantages of visual communication
Permanent, recognisable, immediate
Disadvantages of visual communication
Difficult for people with limited signs or communication is not positioned appropriately
Demands interpretation, different cultures will interpret differently
Advantages of written communication
Kept
Amended
Revised
Disadvantages of written communication
Considered impersonal
Tone can be lost
Not immediate
Main problems of tall organisational structure
Communication through the organisation can become slow wit messages becoming distorted
Spans of control are likely to be narrow
There is likely to be a greater sense of remoteness for lower levels
Advantages of delegation
Gives senior managers more time to focus on important strategic roles
Shows trust in subordinates, motivates them
Trains staff for more senior positions
Helps staff to achieve fulfilment through their work
Encourages staff to be accountable for their work based activities
Disadvantages of delegation
If task is not well defined or not enough training, task is not likely to be done
Delegation will be unsuccessful if insufficient authority is given to the subordinate who is performing the tasks
Managers may only delegate the boring jobs - not motivating
Advantages of matrix structure
Allows total communication between all members of the team
Less chance of people focusing on just what is good for their department
Different specialist knowledge - more successful knowledge
Can be created quickly
Disadvantages of matrix structure
Less direct control from the top
Team members can get 2 leaders
Advantage of effective communication
Employee motivation and labour productivity
The number and quality of ideas generated by the workforce
Speed of decision making
Speed of response to market changes
Reduces the risk of errors
Effective coordination between departments
Disadvantages of electronic media
Require staff to be trained
Reduce social contact and create a sense of isolation
Security issues
Information overload
