The Business Environment

Key words for P3 Hierarchy Line managers Subordinates Authority Delegation Empowerment Span of control Chain of command Refers to the levels of management within an organisation Are responsible for overseeing the work of other staff Report to other staff above them in the hierarchy. They are accountable to their line managers for their actions The power managers have over there subordinates Is when managers entrust there subordinates to make decisions A motivational tool managers use to motivate there employees Measures the number or subordinates reporting to a line manager is the path of authority along which instructions are passed, from the CEO downwards

Organisational structures Businesses can be organised in 3 ways: A functional structure is when the different departments of the business are organised by the different department specialism’s e.g. marketing, finance, human resources, customer service etc. An area structure is when the business is divided into departments based on the different locations that the business operates in e.g. America, Europe & Asia etc. A product structure is when the business is divided into groups based on the different products or services they produce and sell e.g. Iphone, Ipad, Iwatch, Ipod etc.

Examples: Give students 1 minute to write down all there thoughts about this structure then share as a class.

Give students 1 minute to write down all there thoughts about this structure then share as a class.

Give students 1 minute to write down all there thoughts about this structure then share as a class.

How is McDonalds organised? Lets look at how McDonalds is organised? What are the advantages of this of this structure? What are the disadvantages of this structure?

Functional Structure Advantages Disadvantages Chief Executive Board of Directors Production Marketing Accounts Personnel IT Specialisation - each department focuses on its own work It’s clear who is responsible for what Everyone know their role Advantages Departments may have their own agenda Co-ordination may be complex Decisions take longer Disadvantages

How is Coca Cola organised? Lets look at how coca cola is organised What are the advantages of this of this structure? What are the disadvantages of this structure?

Area Structure Disadvantages Advantages Can adapt to local customers Coca Cola Americas Houston, Texas Europe Paris, London, Berlin Asia Pacific Hong Kong Disadvantages Can adapt to local customers Encourages competition between functions Advantages Possible conflict between local and central managers 2) Duplication of some services

How is Nike organised? Lets look at how Nike is organised What are the advantages of this of this structure? What are the disadvantages of this structure?

Product Structure Disadvantages Advantages Hewlett Packard Imaging and Printing Group Personal Systems Group Enterprise Systems Group HP Services HP Financial Services Duplication of some services May be too concerned with internal competition Disadvantages A focus on products Encourages competition between functions Divisions can be separate profit centre Advantages

In what ways can organisational structures be more complex? THINK PAIR SHARE Organisational structures are not always as simple as splitting a business into functional, product or area structures. In what ways can organisational structures be more complex?

Activity – Tesco research Explain how Tesco has structured itself Is it by function area or product? Comment on: the purpose of its structure chains of command spans of control the hierarchy of the organisation If you need help, use the textbook before using the internet

Tip: When you talk about each key term, you must give a defintion Explain how the organisation has structured itself. Comment on the purpose of its structure, chains of command, spans of control and the hierarchy of the organisation Tesco is organised in a functional/area/product structure because… You can see elements of other structures, such as.. because… You can see the hierarchy of Tesco at…. The hierarchy is between…. The line managers of Tesco are… The chain of command for Tesco is… You can see the span of control because… Another aspect of the chart is The purpose of being organised in this way Tesco Pass Machine Hierarchy Chain of command Span of control Tip: When you talk about each key term, you must give a defintion