Thought for the day: ‘Watchout for the fellow who talks about putting things in order! Putting things in order always means getting other people under your control.’ Denis Diderot (1713 – 1784)

Get an A Level 4 Evaluation Level 3 Application & Analysis Level 2 Grade To what extent, Evaluate, discuss, justify, advise, recommend. Level 4 Evaluation Apply, Examine, Analyse, Interpret, Formulate. Level 3 Application & Analysis Compare, Contrast, distinguish, prepare, construct, calculate, explain, comment Level 2 Understand Define, Identify, Complete, Outline, describe, Classify Level 1 Knowledge

2.2 Pre-read Chapter ALL Accountability Level 1 De/Centralisation Lesson 5: Revison- Using the Specimen question paper 2.2 Pre-read Chapter Target Learning Objective Who? Keywords  To construct different types of organization chart and describe the nature of their structure, for example, flat, tall. Explain how organizational structures affect employee motivation, communication and performance (HL). Identify why firms need to organize employees in particular ways, for example, by function and geography. ALL Level 1 Accountability De/Centralisation Chain of command Delayering Delegation Offshoring Outsourcing Organisational chart Responsibility Span of control Analyse changes in organizational structures and their effects. Discuss factors influencing the degree of centralization and decentralization (HL). Discuss the development of more flexible organizational structures. Apply the theories of writers such as Mintzberg and Peters (HL). Analyse methods of organizing human resources that are used by organizations. Analyse the reasons and evaluate the benefits from outsourcing, offshoring human resource to external organisations located nationally or globally. MOST Level 2 Evaluate the role and importance of the informal organization (HL). Evaluate whether firms will befit from outsourcing, off shoring and the migration of human resource functions. SOME Level 3 & 4 3

What is the difference between Accountability & Responsibility? 4

School Organisation Chart Organisation Charts All business have an internal structure – the way human resources are organised. This is known as the formal organisation of the business. It takes into account: The relationship between individuals Who is in charge Who has the authority to make decisions Who carries out decisions How information is communicated School Organisation Chart

Organisation Charts Organisational charts are used to illustrate the structure of the business.

Structure and Hierarchy .. Are shown by an organisational chart Traditional business have a series of levels, where each level has a responsibility and authority over level below them. This is called a hierarchy. An organisational chart sets out who has authority to make decisions and the responsibility for making them.

Structure and Hierarchy It shows who individuals are accountable to – who is directly above them in the hierarchy. The chart also shows how the organisation is divided up. It can be divided by function (department), product or geographical area.

Organisation Charts Why have a chart? Why do business draw such charts: To spot communication problems. Help individuals see their position in a business Pinpoint areas where specialists are needed Show how different sections of the firm relate together

Structures can be ‘tall’ or ‘flat’ Organisations that has lots of levels in their hierarchy are called ‘tall’. They have a large number of people between the ‘top’ and the ‘bottom’. Tall structures have a long ‘chain of command’

Levels of Hierarchy Ranking system What are the advantages and disadvantages of hierarchy structure? Pg 109

Chain of command The HIERARCHY in a business is the order or levels of management in a business from the lowest to the highest rank. It shows the CHAIN OF COMMAND within the organisation – the way the authority is organised. Orders passed down the levels the information passed up. The chain of command is the communication and authority up and down the hierarchy.

Structures can be ‘tall’ or ‘flat’ If the structure is too tall, it affect communication. Messages take a long time to get from one end of the chain of command to the other, and they can get distorted along the way. Decision take a long time to make. And.. There is a lot of paper work.

Structures can be ‘tall’ or ‘flat’ ‘Flat’ organisations only have a few levels in the hierarchy. If the structure is too flat, then managers can get overwhelmed by too many people reporting to them.

Delayering - is when a business removes a layer of the hierarchy from its organisational structure – usually managers in the middle Delayering helps lowering costs. After delayering the structure becomes flatter with a broader span of control. (don’t over do it it could stress managers out) Delayering can give employees enhanced roles with more responsibility Some business use delayering as an excuse to cut jobs. Pg 213 – 214 Hoang

Span of control This refers to the number of subordinates working under a superior or manager. A narrow span of control has the advantage of a firm of close supervision, better coordination of activities, better communication – monitor more closely A wide span of control allows independent decision making. – hard to manage effectively

Broad (wide) vs Narrow span of control Too narrow – staff become de-motivated – being over-managed Too broad – hard to manage effectively.

Activity Construct an organisation chart of AIS. Identify: Chain of command Span of control Delegation responsibility

Activity Job Roles Investigate: The key responsibility of the following person – CEO/Chair Person Board of Directors (BoD) Management Supervisors & team leaders Other employees (operatives)

Delegation & Accountability Higher Level Delegate What is it? Why do it? What are the problems with doing it? Pg 111

Channel of communication Purpose of communication in Business: Communication is essential to the achievement of business objectives. This is because the basic purpose of any communication is to influence the actions of others. Effective communication is therefore an essential aspect of management

Purpose of communication in Business: Goals must be established for the organisation and then communicated to objectives Communication is vital to the development of plans Communication is also essential in the organisation of both human and non-human resources Leading, directing and motivating inevitably require communication skills The control function cannot be effective without the communication of accurate and up-to-date data

Different types of communication: Direction Recap: Chain of command Span of Control

Classification of communication: Direction Vertical and Lateral Vertical: Up and down the organisation Lateral: Communication across the organisational

Communication by direction Downward – giving orders, instructions, communicating objectives Upward – reporting back, expressing views Horizontal – co-ordinating, problem solving

Classification of communication: Formality Formal and Informal Formal – Using channels of communication Informal– Channels established by the employees themselves (passes information quickly but usually distorted).

Direction Where there is no facility for a reply (feedback), it is called one-way communication Feedback built into two-way communication is a feature of a democratic leadership style Sender Receiver Sender Receiver

Feedback Sender receives feedback e.g manager discusses an issue with an employee at a meeting. This is slower than one way but sender gains more information. Sender Receiver

Why is the facility for feedback important? Feedback ensures message is fully understood Feedback enables subordinates to contribute to the process of decision making

Different structures - Activity Different structures - Investigate: Organisation by Product Organisation by Process Organisation by Geography

Factors influencing structures Pg 111

Summary Why do organisations need formal structure? What are the benefits of having a hierarchal structure? What are the drawbacks of having a hierarchal structure? What is meant by ‘a wide span of control?’ What does ‘tall’ and ‘flat’ mean in relation to organizational structures?

Bureaucracy Higher Level Pg 215

Centralised and Decentralised Higher Level Pg 216 - 217 Centralisation and decentralisation refer to the extent to which authority is delegated in a business. If there was complete centralisation, then subordinates would have no authority at all. Complete decentralisation would mean subordinates would have all the authority to take decisions.

Centralised Advantages Disadvantages

Decentralised Advantages Disadvantages

Centralised and Decentralised Question on which to become would depend on – Size Scale Level of Risk Corporate culture Management attiudtes and compentecies The use of ICT Pg 218

Matrix structure/Project Teams/Flexible Structure/The informal Higher Level

Mintzberg/Peters Clarke 105 - 107

Outsourcing, off shoring and the migration of HR Higher Level Pg 223- 225 Outsourcing – the act of finding external people or businesses to carry out non-core functions of a business, such as cleaning or ICT maintenances. Offshoring – a form of outsourcing that involves relocating buisness functions and processes to another country Migration refers to the international movement of labour

TOK To what extent can great military leaders of the past guide chief executives officers who are shaping the structure of their organisation?

Plenary Level achieved_____ What do you now know as a result of today’s lesson? What are your areas for improvement? What are you going to do about this? 42