7.1 Organisational Structure Flashcards
Organisational structure
Is the way in which a business is arranged to carry out its activities.
Authority
Is the power to control situations or the decisions and actions of others.
Responsibility
Is the duty to complete a task and to be accountable for one’s actions.
Matrix organisational structure
Uses teams of employees with suitable skills drawn from across the normal departments to respond to the business’ needs.
Hierarchical structure
Share decision-making throughout the business and give all employees a clearly defined role.
Functional structure
Are based around functions within the business, such as marketing, human resources, and other internal functions that are part of a business.
Geographical structure
based on geographical area in which each division is self-contained with its own functional areas.
Intrapreneurship
takes place when individuals come up with new ideas within their division, department, team or business unit and follow them through.
Empowerment
Is a series of actions designed to give employees greater control over their working lives.
Levels/layers of hierarchy
Refer to the number of layers of authority within an organisation. That is, the number of layers that exist between the chief executive and a shop-floor employee.
Delayering
Is a reduction in the levels of hierarchy within an organisational structure.
Chain of command
is the line of communication and authority existing within a business. Thus, a shop-floor worker reports to a supervisor, who is responsible to a departmental manager, and so on.
Span of control
is the number of subordinates directly responsible to a manager.
Formal structure
The levels of authority and channels of communication are defined by the organisation structure. Indicates the chain of command, the levels of responsibility and authority, how delegation may take place and whether the organisation is centralised / decentralised.
Informal structure
A network for communication and authority other than that outlined by the organisational structure.
Narrow span of control
Allows closer supervision of employees.
More layers in the hierarchy may be required.
Helps more effective communication.
Wide span of control
Gives subordinates the chance for more independence.
More appropriate if labour costs are significant - reduce number of managers.
Tall organisational structure
When the business has many layers of management (narrow span of control and long chain of command). Managers will only have a few people to communicate a decision to.
Flat organisational structure
When the business does not have many layers of management (wide span of control and short chain of command). Managers may have to communicate with many people.
Delegation
Passing down of authority through the organisation.
Accountability
Responsibility remains with the manager or other person who has delegated authority.
Labour productivity
Measures the relationship between the amount of labour used in production and the quantity of outputs of goods and services.
Knowledge management
Is the process of identifying, maintaining and effectively using an organisation’s resources of knowledge.
Centralised organisation
Organisations in which managers hold the greatest decision-making power.
Decentralised organisation
Organisations which give greater decision-making power to employees further down the organisational structure.
Line managers
Have authority over specified people within the organisation.
Staff managers
Have responsibility for support functions within the business, such as information technology systems.
