Management 23.1

Organizational Structure What is an organizational structure? An organizational structure is a way in which a business is arranged to carry out activities. Shows who has authority and responsibility within the organization.

The case for flexible organizations structures -The organization can easily adapt to their customers needs. Organizational structures are a tool used by a company be become more productive. A flexible organization will have some common characteristics: Continually changing Focus on the needs of the customer Use part-time employees or consultants with special skill sets

Organizational structures should reflect businesses’ needs Managers should take into account: The business’s size The type of product supplied by the business The business’s objectives Smaller/younger companies often have to give more responsibility to junior employees

Should facilitate growth and development The organizational structure should allow a business to increase its scale and change in other ways to enable it to meet its corporate objectives. Organizational structures need to adapt due to changes in technology, competitors behavior, changes in government policies and changes in taste and fashion.

Homework Page 308 #1-2 Case Study question The structure of HSBC (2 Questions)

Management 23.2

Formal and Informal Organizational Structures Levels of Hierarchy - A hierarchical organization is an organizational structure where every entity in the organization, except one, is subordinate to a single other entity. This arrangement is a form of a hierarchy. In an organization, the hierarchy usually consists of a singular/group of power at the top with subsequent levels of power beneath them. This is the dominant mode of organization among large organizations; most corporations, governments, and organized religions are hierarchical organizations with different levels of management, power or authority. For example, the broad, top-level overview of the general organization of the Catholic Church consists of the Pope, then the Cardinals, then the Archbishops, and so on.

Chains of Command & Span of Control Chain of command is the line of communication and authority existing within a business. Thus a shop-floor worker reports to a supervisor, who is responsible to a departmental manager and so on. Span of Control is the number of subordinates directly responsible to a manager.

Delegation & Centralization Delegation is the passing down of authority through the organization. Centralization is the process by which the activities of an organization, particularly those regarding planning and decision-making, become concentrated within a particular location and/or group or keeping all of the important decision making powers within head office or the center of the organization.

Decentralization & Informal Structures Decentralization: transfer of decision making power and assignment of accountability and responsibility for results. It is accompanied by delegation of commensurate authority to individuals or units at all levels of an organization even those far removed from headquarters or other centers of power. Informal Structures: type of structure that exists where the organization does not have an obvious structure. Common in the case of professionals (doctors and lawyers) where they operate as a team. Employees have to be highly trained and motivated.

Homework No Homework over the weekend.

Management 23.3

What is organizational structure? Organizational structure refers to the levels of management and division of responsibilities within a business, which could be presented in an organizational chart. For simpler businesses in which the owner employs only himself, there is no need for an organizational structure. However, if the business expands and employs other people, an organizational structure is needed. When employing people, everybody needs a job description. These are its main advantages: People who apply can see what they are expected to do. People who are already employed will know exactly what to do.