2.2 Organizational structure Flashcards
delegation A01
Delegation is the empowerment of a person lower down in the
organizational structure by passing on control and authority to complete a certain task or role.
span of control A01
Span of control refers to the number of subordinates overseen
by a manager, i.e. the number of people who are directly accountable to the manager.
levels of hierarchy A01
The hierarchy in a business refers to the organizational structure based on a ranking system.
Each hierarchical level refers to a different rank with its associated degree of authority and responsibility.
chain of command A01
Chain of command refers to the formal line of authority, shown in an organization chart, through which formal orders are passed down.
bureaucracy A01
Bureaucracy is the official administrative and formal rules of an organization that govern business activity. It involves
prescribed rules and policies, standardised procedures, and formal hierarchical structures.
centralization A01
Centralized structures occur when the majority of decision making is done by a very small number of people (usually the senior management team) who hold decision making authority and responsibility.
decentralization A01
Decentralization occurs when decision making authority and responsibility is shared out with others in the organization.
de-layering A01
Delayering is the process of removing levels in the hierarchy to flatten the organizational structure, thereby widening the span
of control in the hierarchy.
flat/horizontal organizational chart A02, A04
A flat organizational structure means that there are only a
few layers in the formal hierarchy and hence managers have a
relatively wide span of control.
tall/vertical organizational chart A02, A04
A tall organization structure means that there are many layers
in the hierarchy and hence managers have a narrow span of
control.
by product organizational chart A02, A04
Organization by product
Most large businesses have a broad range of products. Hence, they might choose to
structure their human resources according to the various types of product,
e.g. US restaurant giants Yum! Brands Incorporated uses this organizational structure for its various strategic business units (SBU) such as Pizza Hut,
Taco Bell and KFC.
by function organizational chart A02, A04
Organization by function
Most businesses are
organized by function, i.e. the different operational roles within a business such as Marketing, Production, Finance
and Human Resources. Some businesses will also have functional departments in charge of Administration, ICT
and Research and Development (R&D).
by region organizational chart A02, A04
Organization by region
Multinational companies (see Unit 1.6) are often organized by geographical region. This allows the business to be more aware of and responsive to local cultural differences and consumer needs. Such organizational structures allow regional managers to have better overall control over staffing and training issues.
A project-based organization
A project-based organization organizes human resources
around particular projects, each led by a project manager.
Such structures allow businesses increased flexibility to adjust
quickly to market changes and to adopt rapid innovations.
The Shamrock organization
The Shamrock organization refers to Charles Handy’s model
that organizations are increasingly made up of core staff who are
supported by peripheral workers, consultants and outsourced
staff and contractors.
