Organisational structures.

Question 1

Organisations usually have hierarchal structures, what is this, and how is it set out, and what does that show.

Answer 1

The traditional business structure is the hierarchal structure, which is a seiries of levels where each level has responsibility for and authority over the levels below; known as a heirarchy, and can be shown on an organisational chart.
An organisational chart sets out who has authority and responsibility over decisions, and shows who individual employees are accountable to (above) and who employees are responsible for (below). This chart shows the chain of command.

Question 2

What is the chain of command?

Answer 2

This is the path of communication and authority up and down the heirarchy, the chart shows how an org is divided up, e.g. by department or location.

Question 3

Give a hypothetical organisational chart.

Answer 3

1 -Board of directors - give direction, 2 managers - make sure targets are met, 3 - team leaders - responsible for groups 4 and 5, 4 - supervisors- overseers and at the bottom shop floor workers - do the actual work (all with their own job titles.)

Question 4

What are orgs with lots of layers of levels in their heirarcy called?

Answer 4

Tall strucutres, they have long chains of command.

Question 5

Key negative of a tall structure

Answer 5

Worse communication and efficiency as vertical communication ( communication between levels) can take a long time, especially from top to bottom - decisions can take a long time and lots of paperwork - usually autocratic leadership.

Question 6

Benefits of a tall structure

Answer 6

More chances of promotion as more layers, can motivate staff to work well.
Leaders have less span of control as less staff to manage per level.

Question 7

What are flat orgs?

Answer 7

Only a few levels in their heirarchy, people are given more control and freedom - motivating. - Democratic style.

Question 8

What is a key negative of flat?

Answer 8

Horizontal comunication can be slow with large numbers of people on one level with similar authority - could all argue on best course of action.

Question 9

What is the span of control? How do they vary in different structures?

Answer 9

The number of people who report directly to someone above them.
Managers in flat strucutres have wide spans of control, this can often become too difficult for managers to manage if a level is too wide, and can be demotivating.
Managers in tall structures have narrow spans of control and manage less people, allowing them to manage people more closely - however, this may demotivate workers if too narrow as they may feel micromanaged by interfering bosses.
- The span of control should be no more than 6 ideally, assuming people are doing different jobs, 10-12 if they are doing similar routine tasks.

Question 10

How can an organisational structure be improved?

Answer 10

Through de-layering - removing parts of the hierarchy and making it flatter with wider spans of control.
This can lower costs as managers have good salaries and gives junior employees more responsibility and improve efficiency and communication.
- It can cost a business money in the short term as remaining staff may need retraining in new roles, as well as the possibility of redundancy pay.
Too much delayering can cause managers to be stressed and overworked with huge spans of control.

Question 11

What are centralised structures?

Answer 11

Where all decisions are made by senior managers at the top of the business.

Question 12

What are decentralised structures?

Answer 12

Authority is shared out to more employees.

Question 13

Advantages of centralisation

Answer 13

The leaders in charge have lots of experience.
- Managers get an overview of the whole business, so decisions are consistent throughout the business - same people - same thought processes.
-Senior managers are not baised to one department so they can make the best decision for the whole business.
- Decisions can be made quickly as little consultation is required.

Question 14

Disadvantages of centralisation.

Answer 14

• Few people are expert enough to make decisions over the entire business.
• Authoritarian leadership can be demotivating.
  -The organisation reacts slowly to change, allowing competitors to get ahead as senior managers who do not spend time on the shop floors may not see trends straight away and make decisions based on that.

Question 15

Advantages of decentralisation?

Answer 15

Involves more people - increases motivation and feeling of value.
- Employees can use specific sector knowledge.
-Day to day decisions can be made quickly without approval from higher ups.

Question 16

Disadvantages of decentralisation.

Answer 16

Juniors may lack the experience to make informed decisions.
- Inconsistencies may develop between divisions in a business - (different sectors may make different decisions.)
-Juniors may not be able to see the wholistic picture of the business.
- Can take a long time to make decisions with large inputs from multiple parties.

Question 17

What are the factors which cause a business to be centralised or decentralised?

Answer 17

The size, nature, objectives and culture of the business - this will impact the type of structure used by the business.

Question 18

What are matrix structures?

Answer 18

Matrix structures in business are a type of organizational structure that combines functional and product-based structures. In a matrix structure, employees are grouped by both function (such as marketing, finance, or HR) and by product or project team.
-This structure allows for more flexible and dynamic collaboration between teams, as employees can work across different functions to achieve project goals. Communication and decision-making can also be streamlined, as employees have direct access to other team members and can work together to solve problems.
-Matrix structures are typically used in organizations where projects or products require input from multiple functions. They are commonly found in industries such as aerospace, engineering, and software development, where products are complex and require coordination between multiple teams.
-Matrix structures can be particularly effective in organizations with a strong focus on innovation, where cross-functional collaboration is essential for developing new products or services. They can also be useful in organizations that operate in multiple geographic regions or have a global presence, as they can facilitate communication and coordination across different locations.
-However, matrix structures can also be complex and require strong communication and management skills to ensure that employees are working together effectively. It can also create ambiguity and confusion around roles and responsibilities, which can lead to conflict if not managed properly.