1. Organisational Structure University Foundation Course – BUSINESS STUDIES

2. Organisational Structure Early management thinkers –Henri Fayol –Production background, saw the function of organisations as a production model: inputs  outputs –Came up with first type of organisational structure: the classic or formal hierarchy

3. Organisational Structure Formal Hierarchy Clear, simple diagram Clear, simple diagram Quick mental map of an organisation Quick mental map of an organisation States main functions of management States main functions of management Suggests how people/departments fit together Suggests how people/departments fit together

4. Saint George International Mark Wagner Managing Director Joanne Wagner Sales & Bookings Manager Karen Wagner Homestay Accommodation Max Loach Principal Jason Round Director of Studies Teaching Staff Elisabeth Weis Office Manager

5. Principles of Management & Organisational Structure Managerial Functions ProductionMarketing Sales FinanceHR the directors sitting at top of ‘pillars’ the directors sitting at top of ‘pillars’ if functions co-ordinate properly, organisation will succeed if functions co-ordinate properly, organisation will succeed

6. Principles of Management & Organisational Structure Chain of Command Vertical chain of command: Sales force report to Sales manager Directors report to Managing director Information communicated upwards Orders communicated downwards

7. Principles of Management & Organisational Structure Authority Authority flows from position in the hierarchy and is a source of power

8. Principles of Management & Organisational Structure Accountability and responsibility A subordinate accountable to manager A subordinate accountable to manager Manager responsible for the subordinate Manager responsible for the subordinate Personal accountability = high motivation? Personal accountability = high motivation? Personal accountability = a threat? Personal accountability = a threat?

9. Principles of Management & Organisational Structure Span of Control The number of subordinates reporting to a manager Narrow span = tight control, less discretion, fewer mistakes Narrow span = tight control, less discretion, fewer mistakes Narrow span = more levels in hierarchy = greater promotion prospects Narrow span = more levels in hierarchy = greater promotion prospects Wide span of control = less supervision = more delegation = job enrichment Wide span of control = less supervision = more delegation = job enrichment

10. Principles of Management & Organisational Structure Centralisation Only top levels take decisions ‘Head Office’ Tight financial targets, coherent strategies Less opportunity for input from lower levels Poor communication? Demotivation?

11. Principles of Management & Organisational Structure De-Centralisation Widespread delegation Passing power down to lower levels Motivate and empower junior managers Greater innovation? Loss of control by senior managers? Lack of direction?

12. Organisational Structure An Evaluation Do people behave as formal hierarchy suggests? Do people behave as formal hierarchy suggests? In reality, not always… Modern management thinking has moved away from just ONE type of structure… Handy – and different Organisational Cultures… Large firm may contain various cultures with different structures to meet its objectives