Organisational structures

Question 1

Internal organisational structure

Answer 1

It is how a business is organised in terms of communication and decision-making. It identifies specific job roles in the organisational hierarchy and indicates who reports into whom and who is responsible for which particular staff members.
The organisational structure therefore identifies the relationship between different employees, departments and locations.

Question 2

Why businesses have internal organisational structures?

Answer 2

As a business grows, it will need a formal organisational structure to ensure that it runs as efficiently as possible.
The organisational structure will make it clear of the direct reporting lines found within the business and identify specific job roles to ensure that there is no duplication of workload. This will ensure that all staff have clear responsibilities and therefore can operate as productively as possible.

Question 3

Organisational chart

Answer 3

• The simplest way to show how a business is organised is to look at an organisational chart. This shows the management hierarchy in a business and works from top to bottom. Roles are identified and lines of management and responsibility are clearly shown.
• Organisation charts are diagrams that show the internal structure of the business. They make it easy to identify the specific roles and responsibilities of staff.

Question 4

Hierarchical structure -

Answer 4

• the organisational structure has many layers, long chains of command and narrow spans of control.

Question 5

Flat structure -

Answer 5

• the organisational structure has few layers, short chains of command and wide spans of control.

Question 6

Types of structures (2)

Answer 6

1. Hierarchy structure
2. Flat structure

Question 7

Benefits of flat structure (3)

Answer 7

1. Fewer managers are needed – reduce costs
2. Managers give more responsibility to workers which leads to more job satisfaction
3. Quicker communication

Question 8

Benefits of hierarchical structure (3)

Answer 8

1. Promotion opportunities for staff
2. Easy to maintain standards as authority is passed down the line
3. It is easier to check and monitor everyone’s work as there are supervisors/managers at each level

Question 9

Span of control -

Answer 9

• is the number of employees for whom a manager is directly responsible.

Question 10

Factors that affect span of control (3)

Answer 10

1. The experience and personality of the manager.
2. The type of business - if being a line manager requires a great deal of close supervision, then a narrow span might be appropriate.
3. The skills and attitudes of the employees – if employees are highly motivated, highly skilled and highly qualified, then adopting wider spans of control could be more suitable.

Question 11

Chain of command -

Answer 11

• in an organisation chart, shows the lines of authority within the business upon which communication passes.

Question 12

Subordinates -

Answer 12

• a person who has a less important position than you in a company or an organisation.

Question 13

Line manager -

Answer 13

• responsibility for directly managing individual employees or teams.

Question 14

Delegation (3)

Answer 14

• Sometimes a manager or senior employee might choose to give some of their workload to another less senior employee. This is known as delegation and normally takes place down the chain of command.
• The subordinate employee is given permission or authority to do the job that has been delegated, but does not take responsibility for the work.
• Responsibility remains with the manager who delegated the job.

Question 15

Centralised organisations -

Answer 15

• businesses that are centralised keep decision-making firmly at the top of the hierarchy, amongst the most senior management.

Question 16

Benefits of centralised organisations (3)

Answer 16

1. Easier/quicker to implement common policies and practices for the business as a whole
2. Decisions are taken for the benefit of the whole business, not one division or department
3. Consistency will exist amongst branches, therefore the customer experience will be uniform

Question 17

Drawbacks of centralised organisations (3)

Answer 17

1. Lack of authority down the hierarchy may reduce staff motivation
2. There are often more layers in the organisation, which will increase costs
3. Local or junior managers are likely to be much closer to customer needs, therefore the best decisions for the local area may not be taken by the business

Question 18

Decentralised organisations -

Answer 18

• in a decentralised organisation, decision-making is spread out to include more junior managers in the hierarchy, as well as individual business units, such as specific stores, or trading locations.

Question 19

Benefits of decentralised organisations (3)

Answer 19

1. Decisions are made closer to the customer and therefore are more likely to reflect their specific needs
2. Good way of training and developing junior management
3. Should improve staff motivation

Question 20

Drawbacks of decentralised organisations (3)

Answer 20

1. Decision-making is not necessarily looking to the long term future direction of the business
2. More difficult to ensure consistent practices and policies, customers might prefer consistency from location to location
3. Harder to control costs, which means the business may end up over- spending