The Day Chocolate Company A TALL organisation chart One manager per function area who might be assisted by supervisors who are in charge of workers

Lings Car “LINGsCARS.com is an equal 50-50 partnership between my husband, Jon, and me. He is the rear end of the pantomime horse, doing everything that is non-customer facing. I am the face, interacting with customers.” A FLAT organisation chart Two managers who share the supervision of all other staff!

Tall Chain & Narrow Span! More Organisational Structure theory Tall Chain & Narrow Span! Any problems with this structure? Any benefits of this structure? Mrs G / Mr A work

Tall Chain & Narrow Span! Advantages Clear lines of formal authority Managers control fewer people. Promotional opportunities. Disadvantages Slow communication Slow decision making process More supervisors required So What ?

Tall Chain & Narrow Span! Advantages Clear lines of formal authority – you know who to go to, to solve a problem. Managers control fewer people – can spend more quality time with each. Promotional opportunities – encourages staff to improve….. Disadvantages Slow communication – once a decision has been made – the time it takes to go from top to bottom layer! Slow decision making process – may have a lot of managers to discuss options with. More supervisors required – costs money! So What = analysis

Flat …Short Chain and Wide Span. Any benefits of this structure? Any problems with this structure?

Flat….Short Chain and Wide Span. Advantages Fast communications Workers have a wider job role. Low number of managers / supervisors needed. Less supervision of staff. Disadvantages Blurred lines of authority Manager has less time for staff under their control. Lack of promotional opportunities. So What ?

Flat….Short Chain and Wide Span. Advantages Fast communications – decisions passed on to all – quicker reaction! Workers have a wider job role – develop and use more skills Low number of managers / supervisors needed – reduces costs Less supervision of staff – more independent staff – feel trusted/motivation. Disadvantages Blurred lines of authority – unsure of who is responsible for different areas of the business. Manager has less time for staff under their control – quality control becomes an issue – do the managers know what their staff are doing? Lack of promotional opportunities – staff will look elsewhere for promotion. So What = analysis

Flat organisational businesses will use delegation…. You will need access to the internet to watch this clip Clip via laptop Delegation What is it?

More Organisational Structure theory Delegation Delegation involves the passing of authority down the hierarchy. Authority occurs when an employee is given the right to do something by their superiors. This will: - Free up time for management - Motivate workers by providing them with greater responsibilities Mrs G / Mr A work 10

More Organisational Structure theory Communication flow Communication is the exchange of information between individuals or groups Communication can flow in different directions and in different ways both internally within a business and externally from sources outside of the business Feedback occurs when the person sending the original message receives a response Communication problems in the hotel industry!: Clip via laptop Mrs G / Mr A work 11

More Organisational Structure theory Communication flow Communication can come through a variety of communication channels: Open channels are available to all staff members, closed channels are restricted to certain employees Formal communication occurs through official company channels, informal communication through unofficial channels Mrs G / Mr A work 12

More Organisational Structure theory Communication flow CHINESE WHISPERS Your teacher will provide the person sitting at the front of the class with a written saying. That person must whisper the saying to the next person and so on until the last person in the class. They must write down what they think they heard and pass it on to the teacher to read out. You are not allowed to ask for a class member to repeat the saying. Did the class face problems with communications? What was the cause of this problem? What was the result of the problem? How could this problem be solved? Use your understanding gained from this activity to explain how communication problems can occur in businesses. Remember to use business terminology. Mrs G / Mr A work 13

How to improve an organisation's structure? What will it take?

How organisational structure affects business performance More Organisational Structure theory How organisational structure affects business performance Different organisational structures suit different businesses. Firms will have to take into account: Finance – delayering can remove a level within the hierarchy but increase the span of control. Communication – how important is efficient communication within the organisation? Growth – a larger business needs a more formal structure Ownership – as the legal structure of the business changes so too will the organisational structure. A sole trader will have a different structure than a partnership Business culture – an informal entrepreneurial culture will have a different structure than a formal organisation Reasons for re-organisation at Business Link: Mrs G / Mr A work 15

Organisational Structure Communication flows – are the lines short and efficient Levels of hierarchy- how many are necessary? Delegation – can it be used to motivate employees? Organisational Structure Spans of control – are they broad or narrow? Job allocation – how many people are needed to complete the tasks? Workloads – make sure that the work is spread evenly

Delayering To reduce the size of a business hierarchy, especially in terms of a reduction in management. This creates a flatter (less layered) organisational structure. But what does this involve?

Tutor2U have more BS quizzes…. GO to the BS Blog….. Organisation Structure tag….. Find the QUIZ. http://www.tutor2u.net/business/quiz/organisationalstructure/quiz.html Try this quiz