2.2 Organizational structure Flashcards
Organization chart
A diagrammatic representation of an organization’s formal organizational structure.
Delegation
Occurs when a line manager entrusts and empowers a subordinate with authority to successfully complete a particular task, project or a role, it involves passing on control and authority but holding subordinates accountable for their actions.
Advantages of delegation
- can motivate employees, as they feel validated and empowered
- can improve the quality and speed of decision-making, especially in large organizations
- helps to reduce workload of senior managers
- helps to improve the skills and qualities of employees throughout the business
Disadvantages of delegation
- usually comes with additional pay or remuneration
- often requires the business to invest in prior training and development of employees
Span of control
Refers to how many workers are directly accountable to a particular line manager
There is an inverse relationship between the span of control and the number of layers in the organizational hierarchy.
Narrow span of control
- fewer workers report directly to the manager
- managers have a narrow span of control in the organizations that prefer to have a tighter control on decision-making
- can improve communications and control
Wide span of control
- line manager has responsibility for many subordinates
- delegation is inevitable
- can help reduce cost
Levels of hierarchy
Refers to the number of layers of formal authority, it is represented in an organizational chart.
Tall structure
Has many levels of hierarchy, so the span of control is likely to be narrow, decision-making tends to be centralized and relatively quick.
Flat structure
Has fewer levels in the organizational hierarchy, so the span of control is likely to be wide, decision-making is decentralized and takes relatively longer time
The hierarchical structures in an organization show when each worker fits within the firm, showing their level of seniority. The organizational hierarchy also indicates lines of communication, decision-making authority, accountabilities and responsibilities.
Chain of command
The chain of command is the vertical lines of authority through which orders are passed down the hierarchy. Organisation charts show the employees who managers are responsible for and which managers employees are accountable to.
Bureaucracy
Refers to the administrative systems within an organization
This includes the formal policies and procedures of the business. A bureaucratic organization is one that has a lot of formal rules, regulations and procedures. There is a lack of flexibility as the organization is set in the way it does things. Typically, bureaucratic organizations involve a lot of paperwork to get tasks approved and accomplished.
Centralization
Where authority and responsibility for decision-making rests with those at the top of the business hierarchy. In a centralised structure:
- control rests with senior managers who have access to more information and better appreciate the wider implications of decisions than those further down the chain
- senior management are given more control over the decision-making process
- power is concentrated in the hands of a few senior managers
Decentralization
Delegates responsibility to those lower down the chain of command, e.g. to individual departments:
- encourages greater empowerment and motivates those lower down
- offers greater personal development for all employees
- increases the speed of decisions
De-layering
Reducing staff numbers and costs by removing layers of authority.