Organisational Structure Key Terms

Organisational structure The relationship between different people & functions in an organisation – both vertically, from shop-floor workers through supervisors and managers to directors, and horizontally between different functions and people at the same level

Organisational chart A diagram showing the lines of authority and layers of hierarchy in an organisation

Organisational hierarchy The vertical division of authority and accountability in an organisation

Levels of hierarchy The number of different supervisory and management levels between the shop floor and the chief executive in an organisation

Span of control The number of subordinates whom a manager is required to supervise directly

Delegation The process of passing authority down the hierarchy from a manager to a subordinate

Responsibility Being accountable for one’s actions

Authority The ability or power to carry out a task

Accountability The extent to which a named individual is held responsible for the success or failure of a particular policy, project or piece of work

Communication The process of exchanging information or ideas between two or more individuals or groups Internal – within the organisation External – with individuals, groups & organisations outside the business (i.e. suppliers, customers)

Communication One-way = communication without any feedback, or giving instructions in an authoritarian manner Two-way = communication with feedback Communication channel = the route through which communication occurs Open – any staff member can have access to information Closed – access to information is restricted

Channels of communication Formal – channels established & approved by senior management Information – outside of the official channels, often developed by employees themselves (the ‘grapevine’ & gossip)

Vertical communication When information is passed up & down the chain of command May be downwards, or top-down communication May be upwards, or bottom-up communication

Lateral communication When people at the same level within an organisation pass information to each other

Quality Circles A group of employees whose function is to: Identify problems Consider alternative solutions Recommend suitable outcomes to management Example of delegation Workers’ jobs are enriched

Communication Flows Effective communication > more effective decision-making Easier to introduce change Better coordination across departments More motivated & committed workforce Business is more in tune with its customers and key stakeholders

What influences the structure of an organisation?

What influences the structure of an organisation? Size of the organisation Nature of the organisation Culture & attitudes of senior management Skill & experience of its workforce