Organisation Flashcards
What is an organisational chart?
A diagram that shows the hierarchy in an business, usually from top to bottom in terms of seniority.
What do organisational charts show?
- who is responsible for which functions
- who has authority for which subordinates
- lines of communication
- progression opportunities
What is span of control?
The quantity of employees (subordinates) for who a manger is responsible for
Whats a wide span of control?
When a manager is responsible for many subordinates
Whats a narrow span of control?
When a manger is responsible for fewer employees
What are the advantages and disadvantages of wide span of control?
Advantages:
- more autonomy for subordinates
- more chance to show responsibility
- manager has more people to delegate to
Disadvantages:
- manager ay loose control
- staff perform worse
- staff may not like being delegated work
What are the advantages and disadvantages of narrow span of control?
Advantages:
- clearer + more direct communication
- clearer on what to do
Easier for manager to control
Disadvantages:
- may feel constantly “watched over”
What does the effective span of control number depend upon?
- personality of manager
- skills of subordinates
- size of business
- industry business operates in
What is chain of command?
The order of authority and delegation in a business
What are the two types of chain of command?
- long chain of command
- short chain of command
What does authority refer to?
The power an employee has over a subordinate
What are the benefits of a tall structure?
- everyone knows who to report to
- lines of communication clearer
- more control - overall strategic direction
- guidance from above
What are the benefits of a flat structure?
- more empowering - more control + trust
- more teams work + flexible working environment (working form home)
- allows leaders to share ideas with subordinates
Subordinates more contact wit those above - better communication
- cheaper - less people so less salary costs
What is delayering?
A process of reducing the numbers of levels or layers in an organisational structure
What are the advantages do delayering?
- less wage costs in long term
- more employee responsibility due to inc delegation
- faster communication so decision made quicker
What are the disadvantages of delayering?
- spans of control will widen (investment of time + training possibly to get employees used to working more independently)
- redundancy payments (short term)
- damage o staff morale (colleagues leaving and anxiety ab further cuts)
What is delegation?
Te assignment to others of the authority for particular functions, tasks and decisions
What is empowerment?
Giving employees the power to do their job eg authority to make decisions
What does successful delegation and empowerment depend upon?
- type of employee (skills + attitude)
- type of task (level of difficulty)
- training
What is a centralised structure?
Where decision making is firmly at the top of the hierarchy - autocratic leader (usually) who makes decisions
What are the benefits of centralisation?
- ensures control maintained
- economies of scale and overhead savings easier to achieve (marketing eos)
- easier implementation of common policies and practices for whole business
- quicker decision making (usually) - easier to show strong leadership
What are the disadvantages of centralisation?
- more bureaucratic - often extra layers in the hierarchy so more expensive —> more staff
- lack of authority down hierarchy may reduce motivation of managers
- customer service: lost flexibility and have to find leader for decisions so may be slower
What is a decentralised structure?
Decision making is spread out/ delegated to include more junior managers in hierarchy. Region or an area may make the decision
What are the benefits of a decentralised structure?
- improved level of customer service bc decisions made on the spot
- good way of training developing junior management
- facilitates empowerment —> should improve staff motivation
What are the drawbacks of a decentralised structure?
- decision making not necessarily strategic
- harder to ensure consistent practices + policies at each location
- who provides strong leadership when needed (crisis)
What would a tall structure look like in terms of span of control, chain of command and centralisation?
Tall structure, narrow span of control, long chain of command, centralised
What would a structure loo like in terms of span of control, chain of command and centralisation?
Wide span of control, short chain of command, decentralised
What is organisation by function (system) in terms of organisational structure models?
The business is arranged into specialist/ functional areas. This means each function has some input into the output of the businesses product(s)/ service(s)
What would organisation by function look like?
Board of directors
|
Sales + marketing Operations HR Finance
What are the advantages of organisation by function?
- specialists can concentrate on what they do best + share ideas with eachother
- less duplication of roles
What are the disadvantages of organisation by function/ system?
- conflicts may occur over goals, budgets ect
- segregation of functions means communication ab products diff functions are working on is ineffective
- difficult to credit success and or blame ab product performance
- depts ding a lot of work but cant see outcome
What is organisation by product?
The business is organised according to the different products made
What would a business organised by product look like?
Chief executive
|
General manger product A General manager product B General manager product C
| | |
HR Sales Finance Sales HR Sales Finance Sales HR Sales Finance Sales
What are the advantages of a business being organised by product?
- easy to see which products are ‘profit centres’ and performing wel
- each centre has lots of autonomy inc motivation
- teams can see direct result of their product
- communication barriers are broken down for specialists
What are the disadvantages of being organised by product?
- different products compete for resources (finance) causing conflict
- duplication of departments can waste resources
- teams may loose sight of overall direction of business bc focused on their product
What is a matrix structure?
Individuals works across teams and projects as well as within their own department or function. Each ave two a managers, their normal department manager then the project team leader.
What are the advantages of a matrix structure?
- increase motivation as an employee works in small teams so get to know colleagues well and diff business areas
- ideas flow freely through the business
- utilises skills in the organisation
What are the disadvantages of a matrix structure?
- multiple managers can lead to inc pressure
- can take time to work well as a team
- having two managers inc priorities
What is organisation by division?
Usually refers to a large multinational business where there are divisions that can be geographically separated (eg USA, Europe or Asia team) OR can mean the same as organisation by product.
What are the advantages of organisation by division?
- alter products selling to diff geographical markets + what customers want
- easy to identify which regions are performing well
What are the disadvantages of organisation by division?
- duplication of roles - higher overall headcount
- lose consistency in different regions if working to customers needs + wants
