Hierarchies, Centralisation and Organisational Structure Flashcards
What’s a hierarchy?
A series of levels within a business where each level has responsibility and authority over the below levels
Some responsibility is delegated to the level below
What’s a centralised organisation?
The majority of decisions are taken by senior managers and then passed down the organisational hierarchy
Can take a long time, however the most experienced people make decisions
What’s a decentralised organisation?
Where authority delegate down the chain of command, thus reducing the speed of decision making
Employees with expert knowledge help with decisions, but can cause inconsistencies
What are line managers?
Line managers are responsible for overseeing the work of other staff
What are subordinates?
Subordinates report to other staff higher up the hierarchy, they are accountable to their line manager for their actions
What’s authority?
Authority refers to the power managers have to direct subordinates and make decision
What’s delegation?
Delegation is when managers entrust tasks or decisions to subordinate
What’s empowerment?
Empowerment sees managers passing authority to make decisions down to subordinate, it can be motivational
What’s the span of control?
The span of control measures the number of subordinates reporting directly to a manager
What’s the chain of command?
The chain of command is the path of authority along which instructions are passed, from the CEO downwards
What are lines of communication?
Lines of communication are the routes messages travel along
What’s a flat organisation?
Flat organisations have few levels of hierarchy. Lines of communication are short, making the firm responsive to change. A wide span of control means that tasks must be delegated and managers can feel overstretched
What’s a tall organisation?
Tall organisations have many levels of hierarchy. The span of control is narrow and there are opportunities for promotion. Lines of communication are long, making the firm unresponsive to change
What are the 3 ways of organising business structure?
By function, by product, by region
What’s organising by function?
Each functional area does one part of the work- finance, marketing, HR etc (mainly LTDs)
This means specialists can concentrate on their job
Different departments may not work well together
