Organisation design Flashcards
Define organisational design.
A diagram or chart which shows the lines of authority and layers in the hierarchy of the business.
Explain a hierarchy in business.
A hierarchy is a system in which employees are ranked due to their status and authority with employees seeking to move up the hierarchy to improve their salary and working conditions.
Explain the chain of command in a business.
The flow of information power and authority through the organisation. Those at the top have more power and authority and can delegate to those subordinate to them. Complaints and status reports flow up the chain, orders flow down the chain. Both need to be handled at the lowest level possible.
Explain span of control in a business.
This is a number that represents the number of subordinates an individual can delegate to.
In a hierarchy it’s the number of people that a manager is responsible for. Where there are small spans of control there will be a tall hierarchy with highly specialised jobs and a wide span of control will mean employees are given larger roles and more responsibility.
Explain decentralisation in a business.
When a business divides up the organisation into business ideas and has separate budgets for each area. eg north UK and west UK
Explain centralisation in a business.
When a business has its organisation of management and administration at one central head office. The business has one central shared budget.
What are the features of centralisation in a business?
- Branches follow direction from Head office. They all receive deliveries of stock bought by HO buying department.
- Less delegation, management at HO will make decisions
- All recruitment and accounts is done at HO and decisions about product lines, sales and stocks are made here
- Only small decisions such as rotas and stock merchandising can be made at branch level
What are the features of decentralisation?
Authority and power are given to the divisions to make decisions that will affect that division. This allows quicker decisions to be made as they don’t have to go through a central office for approval which helps especially in dynamic markets.
List the different types of organisational structure.
Tall structure
Flat structure
Matrix structure
What is an organisational structure chart.
A chart that shows the employees and who they report to and are responsible for.
What does an organisational chart show?
- Departments
- Job roles
- Responsibilities and
accountability - Lines of authority
- Lines of communication
flow - Chains of command
Explain a tall hierarchal structure.
Information takes a long time to get from the bottom to the top and so it takes a long time for decisions to be made. Work is shared among more people so there is less stress and there is lots of opportunity for promotion. Everyone nows where they are in the hierarchy so it is orderly and organised.
What are the advantages of a tall hierarchal structure?
+ Supervisors have a small span of control so they can get to know their subordinates ell
+ Knowing subordinates means they can delegate the right tasks and make sure their team is ell trained
What are the disadvantages of a tall hierarchal structure?
- Lots of layers and a long chain means the business can be inflexible
- Communications are slow
- It is expensive as there are more managers and supervisors
Explain a flat hierarchal structure.
Often used by restaurants and web design companies. They have a wide span of control and a short train of command so information flows quickly throughout the organisation.
What are the advantages of a flat hierarchal structure?
+ Fewer layers means communication is fast
+ Lots of delegation means staff are given greater responsibility which might mean more opportunities to use their abilities
What are the disadvantages of a flat hierarchal structure?
- Staff can be overstretched or overworked as there is less supervision which can cause stress and demotivation
- Can create a power struggle if the manager is rarely around and subordinates jostle for roles and responsibilities
- Wide span of control means managers have too many staff to manage and may lose touch with them
What is a matrix organisational structure?
When individuals work across teams and projects as well as within their own department or function. Eg a project or task team established for a particular project might include engineers and those working in marketing.
What are the advantages of using the matrix structure?
+ Ideal for a business that works on a project by project basis
+ Flexible structure means that staff from different departments can jump in and out of different job roles
+ Exploits specific skills of staff
What are the disadvantages of the matrix structure?
- Coordination problems between departments
- Conflict of interest across projects
- Staff stretched across projects not spending time in their own departments
Explain the impact of a matrix organisational structure on business efficiency and motivation.
Efficiency: Matrix organisations are only suitable where the business works on a project by project basis. For this type of work this type of organisation is very efficient.
Motivation: Staff are involved in a seres of projects which can be more interesting than just one making it more motivating.
Explain the impact of a tall organisational structure on business efficiency and motivation.
Efficiency: Communications slow in a tall hierarchy as there are many layers which can lead to delayered decision making.
Motivation: Staff can be more motivated because there is lots of opportunity for promotion as there are lots of layers n the hierarchy.
Explain the impact of a flat organisational structure on business efficiency and motivation.
Efficiency: Flat structures can be very efficient because employees most effected by the rota are involved in making it
Motivation: Staff are motivated as they are given more responsibility and have a hand in managing and running the business. Staff can be demotivated as there are less opportunities for promotion.
