Organisational Design 1.4.3 Flashcards
what does an organisational structure show
how employees and management are organised in a business
what does the organisational structure determine
- authority and responsibility
- individual job roles and titles
- the routes that communication flows in a business
- is a way to show which part of the business does what
what does an organisation chart illustrate
- the span of control
- line management
- chain of command
- management hierarchy
what do the levels of hierarchy refer to
the number of layers within an organisation
how were traditional organisations structured
tall with many layers of hierarchy, making them authoritarian
what is the span of control
the number of subordinates for whom a manager is directly responsible
how to determine how wide a span of control is
7 or above is considered wide, 3 or below is considered narrow
benefits of a narrow span of control
- allows for close supervision of employees
- more layers of hierarchy may be required
- creates more effective communication
benefits of a wide span of control
- gives subordinates the chance for more independence
- more appropriate for business’ with significant labour costs because it reduces the number of managers
what does the chain of command describe
the lines of authority within a business
advantages of flat structures (4)
- promotes collaboration and a culture of open communication
- quicker and more effective decision making
- encourages creativity ad innovation (employees have more autonomy)
- increased efficiency and motivation
disadvantages of flat structures (3)
- role ambiguity and a lack of clear hierarchy
- limited opportunities for career advancements
- employees may have to take on multiple roles, leading to burnout and unmotivated workers
advantages of tall structures (2)
- provides a clear hierachy
- encourages specialisation and promotion
disadvantages of tall structures (3)
- communication is limited
- slow decision making
- may lead to bureaucracy and excessive levels of management
what is delayering
the process of removing layers in the hierarchy
why would you change the structure of a business
- reduced costs
- if employee motivation needs boosting
- customer service improves
benefits of delayering
- the number of managers are reduced, so workers are given more authority, increasing motivation
- improves communication
- reduces costs because fewer employees are required
- faster decision making
drawbacks of delayering
- doesn’t suit all companies
- potential negative impact on motivation due to job loses
- initial disruption may occur when people take on more responsibility (overburdened)
- loss of expertise and control
what is a matrix structure
when individuals work across teams and projects as well as within their own department
advantages of a matrix structure
- improved decision making
- improved communication
- allows staff to apply their skills in different roles
- the most effective working can be shared among teams
disadvantages of a matrix structure
- confusion regarding roles may lead to a lack of efficiency
- divided loyalty between teams
- difficulty in coordinating tasks
- higher overhead costs since there are multiple managers
what is centralised decision making
when decisions are only made at the top of the hierarchy
advantages of centralised decision making
- consistency across the business
- the business has a clear direction
- operations and decisions are clearly managed and controlled
- the chain of command is clear
- fast decision making
disadvantages of centralised decision making
- can demotivate employees
- may not work for all business
- may lower productivity
- highly bureaucratic which slows communication
- ignores lower-level staff (negative customer service -> bad reviews)
what is decentralised decision making
when decisions are spread out to include more junior managers
advantages of decentralised decision making
- improved employee motivation
- more responsibility for employees
- managers with less power can make decisions to suit their area
- easier to respond to local market conditions
disadvantages of decentralised decision making
- consistency is not achieved
- managers can make ineffective decisions
- may negatively impact sales
leadership is unclear in times of crisis
what is delegation
when a manager passes on responsibility to someone below them in the hierarchy
advantages of delegation
- empowering
- motivating
- Potential for better quality if the employee has specialised skills
disadvantage of delegation
potential risk of inconsistency because it depends on the employee’s experience
