Organisational Design Flashcards
what is organisational design?
is the formal and systematic way the managment of a business is organised
reasons why a company would use organisational chart
indicate how employees are linked to other employees in business
they help individuals see their position in the business who they are responsible for as well as who are accountablwe to
allow compamies to pinpoint areas where speaclist workers are needed
show how different department relate to each other
how can organisational charts be demotivating to employees
they have no been given the corret=ct status on chart
if they are at the bottom of the chart
does the business really need them
two factors when decising organisational structure
managmnet hierarchy
span of control
what is hierarchy?
is the order or levels of managment in a firm, from the lowest to highest rank
what is span of control?
refers to the number of subordinates directly working under a superior or manager
narrow span of control
Advanatges
tight control and supervision
better co-ordination
better communication
better chances of promotion
Disadvantages
subordinates may not be motivated
more costly- supervise more employees
wide span of control
Advantages
superiors can delegate more work- subordinates have more freedom
disadvantages
requires a suitable superior who is capable of managing a larhe number of people
tall organisational structure
long chain of command
narrow span of control
Advantagres
it enables managers to closely supervise their employees as well as improving the standard of communication in the workplace
enables employrees to specialise in particular job roles
Disadvantages
employees are supervised so closely it prevents them from using thweir initiative and making their own decisions which decreases their motivation
managers find this structure difficult as larger number of junior costs- increasing costs
flat organisational structure
this is often taking out the middle managment
short chain of command
wide span of control
Advantages
saving made from laying off expensive managers
better communication
better motivated staff if they are empowered
senior managers can also make decisions much quicker
Disadvantages
remainign managers may become demoralised- over burdened with work
communication may suffer
fewer layers may also mean that there are fewer oppurtunites for promotion of staff
what are the key organisational functional areas?
production function
finance function
human resources function
research and development function
sales and marketing function
administrative function
production function
responsible for turning raw materials into finished products
finance function
keeps records of money received and paid out
human resources function
purpose of this is to develop staff so that they contribute to achieving the organisation’s objectives
research and development function
aims to improve existing products, create new and better products, improve production methods and create cost-effective processes