Organisational Structure Flashcards
Explain the term organisational structure
An organisation is a group of people who work together. Organisational structure is how the group is organised and it shows who is in charge of who and how decisions move up the hierarchies.
Explain the term span of control
The number of people reporting directly to one manager or supervisor. The span of control may be wide where a large number of staff report to a manager or narrow with only a few subordinates reporting to a manager.
Explain the term chain of command
The vertical line of authority that shows the reporting system from the top of the heirachy (e.g. the CEO) to the bottom (e.g. general staff). Very important as the length of the chain of command can impact on effectiveness of communication.
Tall Structure
The tall organisational structure has a narrow span of control – each manager has less people reporting to them (fewer direct reports or subordinates), however they generally have many layers of management or hierarchy. There are lots of opportunities for promotion, but lines of communication can be long.The companies are generally centralised and suit “autocratic” management.
There are many advantages to a tall structure. Decision making can be quick as they are made by fewer people. There is less chance for misunderstanding and misinterpretation. Training costs can be lower and it is easier to implement policies and procedures. It is generally easier to co-ordinate and control from the centre – eg budgets, and economics of scale / overheads can be easier to achieve
There are also some disadvantages. Decision making and authority can be concentrated in the hands of one person, not allowing the input of others, like local/junior managers who are closer to customer needs. It is more bureaucratic and customer service can be rigid and lack speed – not flexible and more difficult to meet customer needs. Because the lines of communication are long it means they can be unresponsive to change and decision making can take time to filter down.
Flat structure
The flat organisational structure has a wide span of control – each manager has more people reporting to them (more direct reports or subordinates), and they generally have fewer layers of management or hierarchy. Tasks need to be delegated because of the wide span of control. There is faster communication because of less levels of management to pass through. The organisations are often decentralised
There are many advantages to a flat structure. Decentralised organisations allow local managers to make on-the-spot decisions. Customers are more satisfied because their problems are dealt with immediately, meaning decisions are made closer to the customer. Companies are better able to respond to situations. Staff are more motivated as they feel more trusted and able to make decisions
There are also some disadvantages. Decisions can take longer because there are more people involved. More training is required as tasks are delegated to more junior staff. Decisions may not be “strategic” and it can be difficult to ensure consistent practices and policies across all locations. There can be duplication of some roles (diseconomies of scale) and financial control may not be as tight as if it would if more management control
Matrix
The matrix organisational structure has increased complexity as workers have more than one manager to report to. Individuals have responsibilities which span over more than one function and every team member has two bosses.
Project based teams are used and this structure allows teams to be able to respond to issues/customers quickly as the team has the expertise within.
The benefits of matrix is that it encourages employees to have a wider perspective. It enables more specialisation – which increases depth of knowledge and also enables businesses to be able to respond quickly to changes. Team members are able to share information over more than one project and it can help to ensure that businesses do not have workers who are not busy all of the time. Matrix is good for an efficient use of resource and can result in developing team spirit / high morale as individuals feel they have expertise
There are also disadvantages of matrix. It can increase the complexity of the chain of command and there is potential for conflict between two managers or conflict of loyalties with employees.
Workers need to be able to switch projects easily and it can increase management costs
Shamrock
Shamrock has an increased complexity as there are different groups of employees - core, contract and flexi.
Advantages to this are flexible workers can ensure that the company is not paying wages for workers who are not required. Core jobs are generally interesting and rewarding and core workers are well paid because they are vital to the organisation. Contracts/short term jobs are appropriate given the rapidly changing world and non-essential work can be contracted to specialists who are able to work more productively and efficiently. All of this causes a reduction of costs.
Disadvantage of this is that it can also cause many workers wanting more stability than what this structure can offer, meaning temporary or seasonal roles are often not 100% committed – so require a strong manager
What organisational structure does spark have
Spark has a tall structure and is organised in a functional way.
Discuss the impact that the type of organisational structure has on the decision making in a business
If an company has a flat organisational structure, the decisions are likely to be made by more people who are closer to the customer. These factors can cause the decision to be more beneficial to consumers, but can also mean that decisions take longer to make
Disadvantages of the tall organisational structure
The disadvantages of this structure are that employees at the bottom of the hierarchy may be unmotivated if they feel they have no say over the operations of the business, which may lead to lower productivity. As decision making is centralised in a tall organisational structure, decisions may be less innovative and not considered in terms of all stakeholders, potentially making employees unmotivated.
Is tall the best suited organisational structure?
Spark is a highly stressed environment, requiring a strong leadership to help the company take a new direction. This supports the choice of a tall structure as it allows higherups to make all the decisions necessary to benefit spark in the best way possible
