1. Introduction to Business Organisations
Organisation of Departments

2. ORGANISATION CHARTS
An Organisation Chart is used to show the structure of an organisation. An example is shown here:

3. What Does An Organisation Chart Show?
What Does An Organisation Chart Show?
The management structure and main departments within an organisation
The relationship between departments
The reporting structure
The span of control of each employee (the number of people a person has responsibility for)
Who Would Use An Organisation Chart?
Visitors to the organisation
New members of staff
Receptionist

4. What information does an organisation chart show?
LEVELS OF RESPONSIBILITY
LINES OF COMMUNICATION
  LINES OF RESPONSIBILITY (LINE RELATIONSHIPS)
LATERAL RELATIONSHIPS

5. LINES OF COMMUNICATION
The chain of command shown is:
Board of Directors
Managing Director
Sales Director
Sales Manager
Board of Directors
Managing Director
Sales Director
Sales Manager

6. Organisational Structure

7. TALL ORGANISATIONS FLAT ORGANISATIONS
There are 2 main types of organisational structure
TALL
FLAT
TALL ORGANISATIONS
Many levels of management
Managers have narrow span of control
FLAT ORGANISATIONS
Few levels of management
Managers have wider span of control

8. TALL Disadvantages Examples of Tall Organisations Police Force Army
School
TALL
Advantages
Disadvantages
Easier for managers to supervise staff
More opportunity for promotion
Employees more likely to know their immediate boss
It may take longer to communicate decisions and information throughout the organisation
The management structure may be costly due to many highly paid jobs
Employees may not the opportunity to suggest ideas or show initiative

9. FLAT Disadvantages Examples of Flat Organisations
Small Shops eg Newsagent, Chip Shop
Small Offices
Farms
FLAT
Advantages
Disadvantages
Employees have more responsibility – should result in staff feeling valued/motivated
Fewer levels of management – more efficient communication
Employees more likely to be involved in decision making process
Employees may become more stressed due to increased workload
Increase in amount of training needed – due to employees wider responsibilities
Fewer opportunities for promotion to management posts

10. Changing the organisational structure
Organisations are unlikely to remain the same year after year. The business may be growing in size or it may have to reduce its operations.
METHODS OF RESTRUCTURING
Growth – the organisation is becoming larger. More staff are employed by the organisation. New departments may need to be created.
Downsizing – the organisation has to make cut backs without reducing output – some staff may be made redundant, others will find themselves with increased responsibilities.
 Delayering – the organisation removes certain levels of management. This results in managers having wider spans of control and the organisation having a flatter structure

11. What are the benefits and problems of restructuring?
Possible Benefits
Possible problems
Reduction in costs – staffing costs, general running costs (Delayering & Downsizing)
To become more efficient
To improve communication within the organisation (Delayering)
Low staff morale through redundancies, increased workload etc
Staff may not like the new structure and want things to stay the same
Costs of restructuring – associated with moving to new departments
Customers may be unfamiliar with the new structure