2.2 Organisational structure Flashcards
What is meant by organisational structure and what is its purpose?
How businesses organise their human resources in various ways, but there is a need for a formal and organised structure as this helps a business function more efficiently.
Accountability
shows who is held responsible for each particular job.
Responsibility
shows who is in charge of whom and what role or capacity.
Delegation
passing on of control and authority to others.
Benefits + limitations of delegation
The manager saves time by not having to tackle every single task.
Motivate and develop employees who feel that they are trusted.
Poor delegation can cause confusion and a feeling in adequacy → demotivated staff → failure to achieve the tasks set.
Span of control
the number of people who are directly accountable to a manager.
Benefits + limitations of span of control
Fewer layers are needed in the hierarchy → cost control (fewer managerial positions)
Fewer subordinates → easier to communicate and control.
Smaller teams can be more productive
More levels of management → costly.
Hierarchy
the organisational structure based on a ranking system.
Line manager
the person directly above an employee on the next hierarchical level.
Benefits + limitations of having a hierarchical structure
Clear lines of communication within the organisation → improved coordination and productivity.
Establish departments or teams to create a sense of belonging in the workplace → motivation.
Departmentalisation means workers are isolated to their official teams.
Inflexible → unresponsive to changes.
Chain of command
the formal line of authority through which orders are passed down in an organisation.
Delayering
process of removing one or more levels in the hierarchy to flatten the organisational structure.
Benefits + limitations of delayering
Reduce costs
Improves the speed of communication
Encourages delegation and empowerment
Creates anxiety and a sense of security among workers who are worried about their jobs
Overloads staff
Delayed decision-making.
Bureaucracy
the execution of tasks that are governed by office administrative and formal rules of an organisation.
Characteristics of a centralised structure:
Decision-making is made by a very small number of people (senior management team).
Decisions are made without the consultation of other members.
Benefits + limitations of centralisation
Rapid decision-making
Better control
Better sense of direction
Efficiency
Added pressure/stress for senior staff
Inflexibility
Possible delays in decision-making
Demotivating
Characteristics of a decentralised structure:
Decision-making authority and responsibility is shared with others.
Benefits + limitations of decentralisation
Input from the workforce Speedier decision-making Improved morale Improved accountability Teamwork
Costly Inefficiencies Greater chances of mistakes Loss of control Communication issues
Factors that affect the decision of whether businesses ought to become more centralised or decentralised
The size of the organisation The scale of importance of the decision The level of risk The corporate culture Management attitudes and competencies The use of ICT
An organisational chart
diagrammatic representation of a firm’s formal structure.
Distinguish between tall and flat organisational charts
Tall organisational charts: many levels in the organisational hierarchy.
Flat organisational charts: fewer levels.
Advantages of tall and flat organisational charts
Tall:
Quicker and more effective communication within smaller teams.
Easier to control smaller teams
Greater specialisation and division of labour
Greater opportunities for more people to be promoted
Flat: Delegation is important Communication should be improved Cheaper because fewer managers Eliminate ‘them and us’ culture → workers do not feel alienated from senior management.
Hierarchical organisational charts
A hierarchical structures is a traditional approach - subordinates must report to line manager.
The position of workers in the hierarchy indicates their rank, status and level of authority.
Bureaucratic - many levels in the hierarchy, with work processes formally regulated by rules and procedures.
Project-based organisation
Human resources are organised around particular projects
Allows businesses increased flexibility to adjust quickly to adopt rapid innovations.
Each project is led by a project manager supported by a team of workers.
Benefits + limitations of project-based organisations
Flexibility
Productivity
Efficiency
Motivational
Discontinuity
Isolation
Inefficiencies
Conflicting interests and priorities
Matrix structure
A type of project-based organisation where amployees from different departments within an organisation temporarily working together on a particular object.
Shamrock organisation:
Charles Handy’s model that organisations are increasingly made up of core staff who are supported by peripheral workers, consultants and outsourced staff and contractors. It suggested that there are three groups of workers within an organisation:
Core staff
Peripheral workers
Outsourced workers
Benefits + limitations of Shamrock organisations
Flexibility for an organisation
Easy to ‘hire and fire’
The core workers must be well paid and remunerated, while peripheral workers will suffer from a lack of job security. Outsourced workers are experts and therefore expensive.
Communication
the transfer of information from one party to another.
How can culture impact communication?
Language proficiency can have an impact on communication: different languages and accents
Cultural ignorance can cause offense to others
How can ICT impact communication?
Emails: very fast method of communication, but set up costs can be high and data transmission via email is not always secure as it can be hacked into.
Mobile devices
Video conferencing
