organisational design Flashcards
what is organisational design?
the process of shaping a businesses structure so that it meets the aims and objectives of the business
what is an organisational structure?
the formal layout traditional used
what does an organisational structure allows stakeholders to see?
clear lines of communication and authority as well as helping to identify job roles
what is an organisational chat and what does it show?
an organisational chart sets out who has authority and responsibility to make decisions. it shows who individual employees are accountable to and who employees are responsible for. the chart also shows how the organisation is divided up eg by department by product or by location
what is a tall organisational structure?
organisations with lots of levels in their hierarchy are called ‘tall’.
what is chain of command?
the path of communication and authority up and down the hierarchy
does a tall organisational structure have a long or short chain of command?
long chain of command
tall structure aspects
- promotional opportunities
- delegation
- span of control
- decision making
- communication
- more promotional opportunities as more levels but this means higher costs for the business
- less delegation required this could mean less stress for employees but may mean less motivation
- narrow span of control which means tighter control of employees
- decisions take longer to implement because there are more levels to go through
- information may be lost or misinterpreted in the layers of hierarchy
what is a flat organisational structure?
flat organisations only have a few levels in their hierarchy. people are given more responsibility and freedom
flat structure aspects
- delegation
- responsibility
- vertical communication
- labour costs
- decision making
- managers have less time per employee therefore delegation must be better
- employees are given more responsibility which can be motivation but can also lead to high levels of stress
- vertical communication is better as there are fewer layers
- reduced labour costs and better communication should lead to a more efficient business
- decisions can be made and implemented quicker
what is delegation?
giving responsibility for decision making to people below you
what do the managers need to be able to do before delegating responsibility?
the managers need to trust the people they are delegating responsibility to. the best managers know the strengths and weaknesses of the people below them and delegate the right work to the right people.
what is the amount of delegation heavily influenced on?
the amount of delegation is heavily influence by the nature and culture of the business - eg if the business wants its employees to be loyal and feel valued, it will delegate lots oof responsibilities
a business that delegates a lot of responsibilities will need to have many levels of authority.
advantages of delegation
- management time
- motivation
- local knowledge
- flexibility
- development
limitations of delegation
- size of business
- customer expectations
- quality of staff
- confidentiality
what is delayering?
removing parts of the hierarchy
it creates a flatter structure with wider spans of control
what can delayering help with?
lowering costs. cutting management jobs can save a lot of money in salaries. it gives junior employees enhanced roles with more responsibility and can improve communication.
it can cost businesses money in the short term as the remaining staff need to be retrained in their new roles. if you over do it, managers can end up stressed and over worked with huge spans of control
what are centralised organisations?
where decisions are made by a small group of managers at the centre or top of the structure
advantages of centralisation
- senior managers can are big decisions quickly because they dont have to consult anybody else
- senior managers aren’t biased towards one department so they can make the best decisions for the business as a whole
- managers get an overview of the whole business so decisions are consistent throughout the business
- business leaders have lots of experience of making business decisions
disadvantages of centralisation
- excluding employees from decision making can be demotivating
- the organisation reacts slowly to change allowing its competitors to get ahead. this is because the senior managers who make the decisions don’t spend time on the shop floor so they’re slow to notice consumer trends
what is a decentralised organisation?
where decisions are made by employees or managers in different areas or locations
advantages of decentralisation
- involvement in decision making motivates employees
- employees can use expert knowledge of their sector
- quicker response to market changes
- day to day decisions can be made quickly without having to ask senior managers
disadvantages of decentralisation
- junior employees may not have enough experience to make decisions
- different units or levels of the organisation may pursue their own interested or agendas rather than the overall strategic objectives of the organisation
definition of accountability
the acceptance of responsibility for one’s own actions
