Introduction to Business Organisations Organisational Structure

What does organisational structure show? Names of the main departments Employee job titles Management structure Relationship of staff

KEY TERMS Span of Control The number of employees each person (manager) is directly responsible for Chain of Command The passing of information or instructions from one level to another

Relationships LATERAL RELATIONSHIP Link between staff on the same level Staff who report to the same Line Manager LINE RELATIONSHIP Link between Line Manager and staff immediately below them

Line Relationship Lateral Relationship

Benefits of an organisation chart to: CUSTOMER/VISITORS show size of the organisation what activities are carried out who to contact within the organisation EMPLOYEES show size and structure of the organisation reporting structure lines of communication/span of control relationships between staff promotion opportunities

Reporting Structure ACCOUNTABILITY – an employee must be able to explain their action to their manager AUTHORITY – the power that an employee has to instruct others and make decisions RESPONSIBILITY – to take charge of a task, situation or person

TYPE OF ORGANISATION STRUCTURE TALL FLAT        3 levels 5 levels

STRUCTURE - FEATURES TALL Many levels of management posts Narrow span of control Number of specialised jobs FLAT Few levels of management posts Wide span of control

STRUCTURE - ADVANTAGES TALL Easier to supervise staff More promotion opportunities Better worker/manager relationship Staff will have a clear idea of the scope of their duties FLAT Staff are given more responsibility – more motivating Better communication More likely to be involved in decision-making Team working may be developed

STRUCTURE -DISADVANTAGES FLAT Workloads likely to increase Less chance of promotion Wider span of control Staff feel isolated from management TALL Employees may not feel involved in decision-making complicated communication channels Many levels of high paid jobs Lack of opportunity to show initiatives

How organisations change RESTRUCTURING How organisations change

GROWTH An increase in the amount or range of goods sold Employment of additional staff Additional departments added or expansion of existing departments Increase in size and number of premises

DOWNSIZING Number of staff reduced without reducing output Staff are made redundant not sacked Departments can be reduced in size or removed Main reasons for downsizing is to save money

DELAYERING Removing a whole level of management Should lead to management cost savings

OUTSOURCING Buying in services from another organisation Reduces the cost of employing specialist staff Allows staff to focus on core activities Examples – security, office cleaning, reprographic (brochures)

RESTRUCTURING PROBLEMS Improved communication Staff morale can be low BENEFITS Improved communication Organisation becomes more efficient Can reduce staff costs More delegation opportunities PROBLEMS Staff morale can be low Resistance to change Costs Redundancies Confusion after restructure

TEAM WORKING WHY Solve problems Improve quality of product/service Wide range of skills and knowledge Improve inter-department relationships

What makes a good team? Everyone is working towards the same goal Everyone is committed to achieving the goal Members help each other Skills, experience and qualities of each person is used Everyone is responsible for success/failure There is team planning and regular discussion