UNIT 2: 2.2 Organisational structure Flashcards
Delegation
Passing authority down the organisational hierarchy
- the flatter and wider the organisation structure, the greater the degree of delegation
Spans of control
the number of subordinates reporting directly to a manager
-can be wide, fewer levels of hierarchy, manager responsible for a few subordinates
-can be narrow, allows close control to be kept over subordinates, manager responsible for a few subordinates
Levels of the hierarchy
Refers to the number of layers of formal authority (represented by an organisational chart)
-tall organisational structure, narrow spans of control, many levels of hierarchy (slow comms)
-flat organisational structure, wide spans of control, fewer levels of hierarchy (short chain of command, better comms)
Chain of command
route through which authority is passed down an organisation
- taller organisational structure, longer chain of command, slower comms
Bureaucracy
An organisational system with standardized procedures and rules
- rational and efficient system
-however impersonal and ineffective when a decision is needed to to be adapted to suit an individual case
Centralisation
keeping all of the important decision-making powers within head office or the center of the organisation
Decentralisation
decision-making powers are passed down the organisation to empower subordinates and regional/product managers
Delayering
removal of one or more of the levels of hierarchy from an organisational structure
Matrix structure
an organisational structure that creates project teams from across traditional functional departments
-approach to organising a business
- task/project focused
- leads to more innovative/creative ideas
-crossover of ideas between people with specialized knowledge in different areas
Flat/horizontal organisation chart
- Few levels of hierarchy
- Short chain of command
- Wide spans of control
- Delegation likely to be widely used
Tall/vertical organisation chart
- Many levels of hierarchy
- Long chain of command
- Narrow spans of control
- Delegation likely to be limited
Product-based structure
Organisation divided according to products or services it offers
PRO: allows a team to focus on a single product or service, with appropriate leadership structure
CON: compartmentalization, lack of coordination or even duplication of developments
Functional-based structure
Organisation divided according to specialized functions or departments such as finance, marketing, operations and HR
PRO: Grouping employees by functional skills, can improve efficiency
CON: few horizontal links between departments, lack of coordination between them
Regional-based structure
Organisation divided according to geographical or territories
PRO: local management means leaders will be familiar with local business environment and culture
CON: More difficult to be consistent with core company beliefs (same ethical code of practice from one region to the next)
External factor ECONOMIC CHANGE - what are the appropriate changes to organisation structure
Economic changes- long term downturn or recession in economy of the country business operates in
Delayering of the organisation: taking out levels of hierarchy to reduce salary costs
Adopting a regional structure: allow for expansion in other countries that might be less affected by an economic recession
