Organisational structures Flashcards
Organisational structure (A01)
Organisational design is the framework that provides a business with a structure to achieve it’s objectives.
Chain of command
Is the way authority and power is passed down the levels of hierarchy. The longer the chain of command the slower the communication and potentially decision making.
Span of control
The number of employees working directly under a manager. – If manager has many subordinates this is called wide span of control, if few subordinates considered a narrow span of control.
Delegation
Delegation involves the passing of authority down the hierarchy.
- Will free up time for management – allows them to focus on high-level tasks.
- Motivate workers by providing them job enrichment
- May mean decisions are made closer to the grass roots
- Improve productivity
Delayering
Delayering involves reducing the levels in the hierarchy, and hence the chain of command, by removing levels of management.
Benefits and disadvantages of delayering
Benefits:
- Lower costs by minimising number of managers
- Improve communication and quicken decision-making
- Boost employee motivation and engagement by giving staff more autonomy.
Drawbacks:
- Job losses of managers
- Can create a sense of insecurity and uncertainty among employees
- Employees may face heavier workloads as they take on additional responsibilities
- Business may lose experience and skills in the managers it lets go
Traditional hierarchy
There are many layers to the hierarchy and span of control is narrow at the top, but will widen somewhat at the bottom where supervisors’ key role is to monitor performance.
Advantages and disadvantages of traditional hierarchy
Advantages:
- Control is at the centre, and senior management understands exactly who does what, and what their responsibilities are.
- Paths of communication and responsibility are clearly defined
- Departments understand their position in relation to other departments within the organisation.
- Each workers knows how they fit into the organisational structure
Disadvantages:
- Senior management are distanced from those who implement decisions. What senior managers perceive as being the case may, in reality, be very different.
- Vertical communication difficult, as information received by management distorted by the layers it must pass through. Very long chains of communication could even mean instructions are out of date by the time they are received.
Flatter structure
Wide and flat means that each superior is responsible for a large number of subordinate. Requires greater delegation but fewer levels allowing quicker communication through the firm.
Benefits and drawbacks of flatter structure
Benefits:
- Encourage collaboration, creativity and innovation
- Quicker decision making and easier communication
- Lower costs than tall structures
- Empowerment of workers
Disadvantages:
- Less opportunity for career advancement
- Decision-making may become unclear in some cases
- Wider spans of control
- May lead to a lack of manager accountability
Tall structure
Tall and thin structures occur when each supervisor is responsible for a few subordinates. This allows for closer supervision and communication between the two levels.
Advantages and disadvantages of a taller structure
Advantages:
- Employees can be closely supervised
- Good promotion prospects for staff
- There is a clear management structure showing authority and responsibility
Disadvantages:
- Employees may feel restricted
- Requires a number of middle managers – which is costly
- Decisions will take longer
Matrix structure
Attempts to organise the management of different tasks in a way that cuts across traditional departmental boundaries. – This structure enables people with particular specialist jobs to work together.
Advantages and disadvantages of matrix structure
Advantages:
- Skilled staff can work on multiple project
- Improves communication
- Encourages idea sharing and innovation
- Makes better use of human resources
- Increases flexibility and employee motivation.
Disadvantages:
- Difficult to define responsibilities and reporting to two bosses may put a lot of strain on an individual
- Risk of slower decision-making due to burden placed on individuals
- Higher costs for extra support systems (e.g. ICT, admin)
- Coordination issues due to differing departmental cultures and methods
Centeralised structure
Involves keeping all of the major responsibilities at the centre of the organisation. E.g. head office makes all major decisions.
Advantages and disadvantages of centralsied structure
Advantages:
- Senior management have more control
- Standard procedures across all branches allows cost savings to be made
- Decisions are made in the interests of whole business
Disadvantages:
- Branch managers have limited responsibility
- There may be few promotion opportunities within branches
- Workers feel that they are not involved in decision making
Decentralised structure
Involves given decision-making powers to individual branches of an organisation.
Advantages and disadvantages of decentrilisation
Advantages:
- Workers are empowered to make decisions
- As a result workers tend to be motivated
- Branches can respond to change quickly
Disadvantages:
- Senior managers have no insight on day-to-day decisions that are made
- More managers with the skills to make decisions will be needed – which may be expensive
