Types of Organisational Structure Flashcards
What is the definition of an organisational structure?
- the way in which management is organised, both horizontally (levels of hierarchy) and vertically (by function, by operation or by matrix)
What is an organisational chart?
- a diagram showing the levels of hierarchy and lines of authority within an organisation
What are levels of hierarchy?
- they refer to the number of layers of authority within an orgnaisation
What is the span of control?
- the number of subordinates reporting directly to a manger
What is centralisation?
- it places decision making powers firmly in the hands of senior personnel
What is decentralisation?
- it gives decision making powers to those at lower levels in the organisation and to employees in branch offices and other locations
What is delayering?
- the removal of one or more layers of hierarchy from the organisational structure
What is a tall structure?
- an organisation with many levels of hierarchy and a narrow span of control
What is a flat structure?
- a management structure based on a wide span of control, therefore requiring relatively few layers of hierarchy
What are the advantages of a flat structure?
- cuts costs (lower wages)
- junior employees become empowered
- better communication of instructions
- more competitive
- improves motivation
What are disadvantages of a flat structure?
- wide spans of control give staff a heavy workload which may impair efficiency
- experience & knowledge of middle managers missed
- increased training costs
- not possible for managers to monitor work closely
What are the advantages of a tall structure?
- a narrow span of control enables managers to keep close control over subordinates
- less training costs
- easier to get promoted
- easier workload
- useful in more complex, difficult or diverse jobs
What are disadvantages of a tall structure?
- doesn’t give junior employees as much independence
- reduces competitive nature
- expensive wage/salary costs
- communication is more difficult
- less opportunities to prepare for promotion
What are the advantages of delayering?
- can improve competitiveness of a business
- gives junior employees a wider range of tasks & greater responsibility
- easier to communicate
What are the disadvantages of delayering?
- fear of job losses
- increased training expenditure
- heavier workload
- impaired efficiency
- experience and knowledge of middle managers may be missed
What are the advantages of centralisation?
- rapid decision-making
- ensures the business pursues the objectives
- less people needed = costs reduced
- uniformity
- economies of scale
What are the disadvantages of centralisation?
- lack of experience lower down
- head office doesn’t have local knowledge
- miscommunication
- poor motivation
What are the advantages of decentralisation?
- improve motivation as junior employees are given greater authority
- reduces workload of senior managers
- junior employees get better understanding of operational matters
- improve communication
- decision made closer to customers
What are disadvantages of decentralisation?
- senior managers need to be told of decisions to keep the business coordinated
- lack of communication and coordination
- loss of uniformity
- company objectives not followed
- loss of economies of scale (costs increased)
What is a matrix structure?
- the organisation’s individuals work across teams and projects as well as within their own department or function.
What are the advantages of a matrix structure?
- flexible & can use best skills for each task
- allow additional dimension to job = improved motivation
- team members have clear objectives and responsibilities
- clear identities
What are the disadvantages of a matrix structure?
- difficult with 2 managers because of divided loyalties
- can be made more expensive as more admin & support are needed
