5 Flashcards
What does HRM stand for
Human resource management
What does the HRM department concern
How people are managed by the business in order to meet the strategic objectives of the business
What is an organisational chart
A diagram that shows the hierarchy in a business, usually from top to bottom in terms of seniority, authority, responsibility or control
What is meant by hierarchy
The structure in which items are ranked according to levels of importance
What do organisational charts show
- responsibility and authority
- Who is a line manager of who
- progression opportunities
What is meant by span of control
The number of employees or subordinates for whom a manager is responsible
What are the 2 types of span of control
Wide and narrow
Advantage of a narrow span of control
Manager can spend more time giving staff clear and direct instructions
What is a disadvantage of a narrow span of control
Staff may feel little trust and responsibility so are demotivated
What is an advantage of a wide span of control
Independence may be motivating for staff
What is a disadvantage of a wide span of control
Staff may perform worse if manager has less control
What are some factors the influence the effectiveness of the span of control
- Personality it manager
- Skills/qualities of subordinates
- Size of business
- Industry
What is meant by chain of command
The way in which responsibility/authority for employees is organised within a Business
What are the 2 types of chain of command
Long and short
What is meant by levels/layers of a hierarchy
Refers to the number of levels in an organisation
What are line relationships
Vertical relationships (in a hierarchy) between managers and subordinates
What is meant by staff relationships
Horizontal relationships between members of the hierarchy on the same level
May exchange info and advice
What is meant by authority
The power of a person to allocate resources, make decisions and give orders
What is meant by responsibility
The duty or obligation to complete a task or do something that has been assigned to you be a person with authority
What is meant by delayering
The process of reducing the number of levels in an organisational structure
What are advantages of delayering
- Reduce costs
- More employee responsibility/delegation so improve motivation
- Faster communication and thus decisions made quickly
What are disadvantages of delayering
- Increase span of control (need for investment in training)
- Redundancy costs
- Damage staff morale due to loss of friends and fear of losing job
What is meant by delegation
when Responsibility is authorised to a subordinate by a manager
What is meant by empowerment
Giving employees the power to do their job
What is meant by a centralised structure
Where authority and decision making is controlled by those at the top of the hierarchy (senior management)
Example of a business with a centralised structure
McDonald’s
What are benefits of a centralised structure
- Easier to implement common policies for whole business
- Easier to achieve EOS
- Quicker decision making due to less consultation
- Easier to coordinate and control eg budgeting
Disadvantages of a centralised structure
- Local/junior managers feel lack of responsibility
- They’re more likely to be close to customers so understand they’re demands and can operate with better customer service
- More layers so Increase costs
What is meant by a decentralised structure
Decision making is spread out to include more junior managers in the hierarchy, as well as individual trading units or trading locations
What is an example of an industry that may operate with a decentralised structure
Hotel chains
Benefits of decentralised structure
- Decisions made to closer to customer (more speed and understanding)
- Flatter hierarchy (reduce costs)
- more responsibility gives empowerment and motivation
- Better for future promotions (development further down hierarchy)
Drawbacks of decentralised structure
- Decision making may not be strategic
- Difficult to ensure common policies across whole business
- Diseconomies of scale (duplication of roles in each region)
- Lack of strong leadership
How do most businesses operate in terms of a centralised and decentralised structure
A mixture of both
What is a tall structure
An organisational chart with more layers
What are characteristics of a tall structure
- Narrow span of control
- Slower communication
- More promotion opportunity
- Long chain of command
What reasons are there for using a tall structure
- Line of communication is clear
- Managers know who to delegate to
- Strong leadership + guidance
What is a flat structure
An organisational chart with few layers
What are the characteristics of flat structures
- Wide span of control
- More delegation and responsibility
- Faster communication to the top, maybe slower communication to manager though
Reasons for using a flat structure
- Empowerment due to less controlling
- Teamwork
- Flexible work environment
- Easy communication
- Lower costs
What is meant by organisation by function
The business is organised into departments/specialist areas
What is meant by organisation by product
Business is organised according to the different products made
Each product department has its own functional areas
Advantages of organisation by function
- Specialists can concentrate on what they do best and share ideas with each other
- Less duplication of departments
Disadvantages of organisation by function
- Conflict May occur
- Slower communication due to segregation
- Difficulty In crediting success or Blake
- Can’t identify their outcome
Advantages of organisation by product
- Easier to see which product is performing best
- Communication barriers for specialists broken down
- Can see direct result of work
- Independence of teams
Disadvantages of organisation by product
- Different products competing for resources may cause conflict
- Duplication of departments (waste resources)
- Less specialisation, lose sight of overall direction of business
What is meant by organisation by division
Business is organised by location
Advantages of organisation by division
- Can see which area is performing best
- Teams see direct result of work
- Increase independence
Disadvantages of organisation by division
- Competing for Resources May cause conflict
- Duplication of department
- Less focus on direction of whole business
What is meant by a matrix structure
An organisational system where individuals work as part of both a project and their own department
Have 2 managers
Can be temporary or permanent
What is an example of an individual who is working within a matrix structure
A person from accounting working an a team launching a new product
Advantages of a matrix structure
- Allows more than one large scale project to take place at the same time
- Teamwork with a number of people can boost morale within a workplace
Disadvantages of a matrix structure
- Confusion May occur due to conflicting orders from management
- May be time consuming (less efficient)
- Team members may neglect their functional responsibilities
