ORGANISATIONAL DESIGN Flashcards
define hierarchy
A system in which members of an organisation are ranked according to relative status or authority
what happens at the top of the hierarchy?
more authority, greater decision-making responsibilities (authority is having the power in decision making and to give orders)
what happens when there is more level of the hierarchy?
communication can be slower/understanding of ‘shop floor’ issues are harder
define the chain of command
- The system where instructions are passed from one person to another
- the flow of power/authority - Refers to the levels in the hierarchy
- Can delegate tasks to those subordinate to them in the hierarchy
define delegation
giving someone else responsibility to perform tasks
define the span of control
The number of people directly under the control of a person
what does a wider span mean? and what does this lead to
you have more people to manage
Greater decision making powers and responsibility
Could add stress/lack of control
what does a narrow span mean? and what does this mean
fewer people to manage
Manage workers closely and control actions, minimising mistakes
Less motivation in job/feelings of micromanaging
what is centralisation?
Decision making is kept at the centre such as by senior managers
Standardised decisions applied to all
Top-down approach
advantages of centralisation
+ Cost-effective – bulk buying; EOS
+ Consistency of decisions
+ Appropriate for situations where managers have knowledge and workers are low skilled
+ Suited to authoritarian leadership styles
+ More suitable in times
disadvantages of centralisation
- Inflexibility
- Can account for local tastes/trends
- Lack of creativity; staff dissatisfaction
what is decentralisation?
Decision making is delegated down to
shop/factory/regional level; delegated to managers in charge of regions etc.
advantages of decentralisation
+ Scope to make more personalised decisions
+ Encourages bolder thinking/risk-taking
+ Effective where local teams are best placed to make decisions to meet customer needs
+ Appropriate where business spread over wide geographic area and local trends/needs important
+ Effective at reducing senior managers
+ Allows for flexible working conditions and supports job enrichment
disadvantages of decentralisation
- Inefficiency in buying; may lead to DEOS - Risk of errors
- Lack of consistency
