Organizational Structure Business Management Organizational Structure

Think about it… President Roosevelt once said, “The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint enough to keep from meddling with them while they do it.” Explain what he meant by this. Theodore Roosevelt (1858-1919), 26th president of the USA

Organizational Chart Formal and organized structure to make sure the business operates in an efficient and functional manner. This can be determined by two things: 1. Accountability….what do I mean by this? Shows who is responsible for what job and their performance. 2. Responsibility…what do I mean by this? Shows who is in charge of whom.

Activity: In pairs: Brainstorm and create a “typical” structure for OUR School. Hints: Think about who is at the top and work your way down. You have 5 mins.

Formal Organization: Job Roles As a business becomes larger and more complex it has to be more structured. If not, there would be total chaos and all the tasks and roles will not be fulfilled. An organizational structure is helpful in many ways: Can determine specialist areas. Determines who is the supervisor; form of accountability. Determines who has authority and their responsibilities. Explains how all areas in the business are linked. Can verify your own position in the company. Identifies the channels of communication in an organization.

Organizational Charts What is an organizational chart? It is a diagram which represents a firm’s formal organizational structure. Charts show four important features of a business: The different functional departments within a business. The chain of command, various positions of authority. The span of control, measures the number of staff that are accountable to a manager. The channels of communication, the route that messages are communicated....

Delegation What is it and why is it important? It is when managers pass on to others some of their roles and responsibilities. It is the passing on of control and authority. It is important because the manager is entrusting and empowering their staff to complete a task or project. Their staff will be held accountable for their actions. The responsibility will remain with the manager. So try to understand the difference between the two.

Delegation How many here want to be managers? What do you think would be one very important skill for managers to master? That’s right, the art of delegation. Think about it…if you are a manager and you try to do every little thing that pops up on a daily basis, will you be a successful manager? Will you be a productive manager? Effective delegation has tremendous benefits: As a manager you save time and can focus more on strategic issues. It can also motivate and develop staff trust and talents.

Delegation So, how can ensure that you are properly delegating? Now the opposite is true for poor delegation. If you are always stepping in the way and taking credit for others work, it will lead to confusion and distrust. This will hurt your productivity and can de-motivate staff. So, how can ensure that you are properly delegating? REMEMBER….SMART? For delegation to be effective it must be: Specific Measurable Agreed Realistic Time-based Ethical

Span of Control Key word here is control. The number of people who are controlled by a manager. They are directly accountable to a manager. The manager is accountable to the CEO or VP. So, the higher up in the organization’s hierarchy the wider the span of control tends to be. Some examples of span of control.

3b. Wide Span of Control CEO Assistant Worker This occurs when a manager has many people under their control. What is the advantage of this? There are fewer layers in the hierarchy of the organization. Cost will be kept under control. The flatter the organizational structure the better communication will be between the different levels of hierarchy. …

What is the advantage of this? CEO Director Manager Worker A Narrow Span of Control occurs when there are fewer subordinates who are accountable to a manager. What is the advantage of this? Easier to communicate with and control the team. Smaller teams may be more productive. However, with more levels of management in the structure, this system can be costly.

Advantages Wider and Narrower Wide Span of Control (flatter structure) Narrow Span of Control (taller structure) Delegation is an important part of managing Faster team communication Improved communication Small teams are easier to control and manage Cheaper to operate Greater specialization and division of labour Smaller psychological gaps between those at the top and those at the bottom Greater opportunity to earn a promotion

Advantages Wider and Narrower Wide Span of Control (flatter structure) Delegation is an important part of managing. Improved communication. Cheaper to operate. Smaller psychological gaps between those at the top and those at the bottom. Narrow Span of Control (taller structure) Faster team communication. Small teams are easier to control and manage. Greater specialization and division of labour. Greater opportunity to earn a promotion. …

The degree of control granted to a manager will depend upon… Experience, competence, and traits of the manager Nature of management style Skills and dynamics of subordinates The nature of work The type of production system used

Levels of Hierarchy Refers to the structure of an organization. It is based on a ranking system. Will be ranked according to who is at the top, middle, and bottom. Who is at the top? Who is at the bottom? These levels of an organization are best viewed in a chart. Each level in the hierarchy refers to the different rank and its associated degree of authority and responsibility. Think of military ranking system, with the general at the top and the private at the bottom.

Level 1: CEO Level 5: employees Level 2: BOD / Directors Level 4: Line Managers Level 3: Directors / Managers Level 2: BOD / Directors Level 1: CEO CEO Two main advantages of using hierarchical systems: 1. Show clear lines of communications. 2. Establish departments or teams. They also have their limitations: Departmentalization can lead to workers being isolated. These structures tend to be inflexible. …

2c. Flat vs. Tall Organizations Narrow span of control leads to tall hierarchical structures. Wide span of control leads to flatter hierarchical structures.

Chain of Command Refers to the formal line of authority through which orders are passed down in an organization. Think about how the military chain of command works. A flat hierarchical structure will have a short chain of command.