Unit 1: The Dynamic New Workplace Organizational Structure & Communication

“There is no degree of human suffering which in and of itself is going to bring about change. Only organization can change things.” Susan George ( ), author

Structure This Unit looks at the various ways that businesses organize their human resources. In a small business (sole proprietorship), there may be an informal organizational structure  the owner or boss has a range of job roles including Marketing Operations Finance  they also carry out more mundane tasks such as being a sales person and a stock controller. The sole trader changes roles depending on the demands of the job at a particular point in time.

Need for Structure Accountability  Shows who is held responsible (or answerable) for what job Responsibility  Shows who is in charge of whom

Formal Organization Takes into account  Relationship between individuals  Who is in charge  Authority to make decisions  How information is to be communicated

Business Structure Two types of structures are: Built up (develop)  Developed as a result of current skills employees possess Created  Appropriate jobs are determined and employees are then hired

Organizational Charts Illustrate the structure of a business Reasons for producing one include:  Identify communication problems  Identifies a specific employee and their respective responsibilities  Pinpoints areas where specialists are needed  Shows the relationships between departments

Example Managing Director Sales Director Sales manager Sales People Finance Director Accountant Accounting Clerks Production Director Production Supervisor Technicians Operators Quality Control Exercise – Ainscough Engineering

Chain of Command Management hierarchy and span of control must be taken into account when setting up an organizational chart Hierarchy  Order of management from lowest to highest Chain of command  The way authority is organized

Span of Control The number of subordinates working under a specific supervisor Between three and six subordinates has been identified as the optimum span of control  Tight managerial control  Limitations to any managers ability to control large numbers of people  Exercise – School Structure

Authority Line  Most common and shows authority a supervisor has over a subordinate  Work allocation and a clear understanding Staff  Manager in one department has authority in another department Functional  A specialist has authority to make a manager accept his/her recommendations

Delegation Passing of authority and responsibility down the organizational chart Spetzer Study (1992) suggested employees need to be empowered in order to make effective decisions Requires planning and clear explanations Interference should be avoided Only suitable candidates should be asked

Mini Case Study Case: Manchester Film Association Source: Business Studies, 3 rd Edition; Hall, Jones, Raffo, pg 412

Levels of Hierarchy Refers to an organizational structure based on a ranking system Those at the top include the CEO Those at the bottom include the most unskilled employees in the organization The person directly above an employee on the next level is known as the line manager

Advantages Show clear lines of communication within the organization  Which in turn improves coordination and productivity Establishes departments or teams  Creates a sense of belonging in the workplace and acts as a form of motivation

Limitations Departmentalization can lead to isolation (within the organization as a whole) Little contact with other departments This might be problematic when external influences force change in the hierarchical structure

Flat and Tall Organizations Tall structures have many layers of organizational hierarchy Each manager has a narrower span of control By contrast, flat structures have fewer levels in the hierarchy, thus each manager has a wider span of control

The Inverse Relationship List some advantages and disadvantages of each organization

Delayering Process of removing one or more levels in the hierarchy in order to flatten out the organization structure Reduces the numbers and widens the span of control  Exercise – Re-Engineering

Purpose of Delayering Reduces cost by removing levels of management Improves communication speed within the structure Encourages delegation since wider spans of control should provide opportunities for employees to take on more responsibility

Downside of Delayering? Often associated with layoffs, further reducing the size of the core staff Creates anxiety and insecurity Overstretch employees as their workload increases Decision making ability is reduced as managers take on more subordinates  Case Study – Havant College