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Transcript of as a business grows and more and more people enter the firm, a formal organisation structure will be...
ORGANISATIONAL STRUCTURE
WHY IS ORGANISATION IMPORTANT? as a business grows and more and more
people enter the firm, a formal organisation structure will be necessary to ensure that: everyone knows their role all tasks are co-ordinated everyone knows who they are accountable
to and responsible for
POOR ORGANISATION can lead to: tasks being missed out tasks being repeated- poor communication people not know their jobs frustration within the workforce poor quality goods causing a fall in sales
TYPES OF ORGANISATION Most firms organise themselves into
departments/functions and then levels within the department. This is referred to as a pyramid style and it can be either a tall pyramid or a flat pyramid.
TYPES OF ORGANISATIONSFlat Pyramid
- fewer levels of hierarchy- wide spans of control- short chain of command- common in informal firms
TYPES OF ORGANISATIONSTall Pyramid
- several levels of hierarchy- long chain of command- narrow spans of control- typical in a formal firm
SPAN OF CONTROL
A wide span is where a manager has many workers directly below them
A narrow span is where a manager has few workers directly below them
THE IDEAL SPAN OF CONTROLThere isn’t one!
It will depend upon:
- the job involved- the skills of the workers- the skill of the managers- the amount of money the firm has
PROBLEMS WHEN THESPAN OF CONTROL IS TOO WIDE
workers are not given enough attention
workers may lack the necessary guidance
poor relationship between manager and worker
PROBLEMS WHEN THESPAN OF CONTROL IS TOO NARROW
workers feel stifled
expensive as more managers are employed
conflict may exist due to over-supervision
RECAP Do the Test Yourself, Q1 and Q3
Recap the following:
Organisation ChartHierarchyLine ManagerSubordinateChain of CommandSpan of ControlDelegation
HOW CAN A BUSINESS ELIMINATE THE PROBLEMS OF A LONG CHAIN OF COMMAND?
Removing some of the levels of management, or layers.
This is called Delayering
What effect may this have within the business? How will people feel?
DEFINITIONS Delayering.
This can lead to more group, team or cell work. There may be a team leader nominated, but all subordinates under them will be at the same level in the hierarchy. This could lead to the lack of need for supervisors or quality control inspectors, if the workers are responsible for their own cell.
HOW WILL THIS PROCESS HELP THE BUSINESS? Empowerment of staff
Downsizing the workforce
What will this do to the motivation of the staff?
VALENTINES TASK
CENTRALISATION The major decisions of a centralised
company are made at the Head Office. The decisions are then sent out to the
branches of the business. Standardised systems and procedures
are in place to reduce costs
Problems include: slow decision making process, slow to respond to the demands of the market and demotivated staff.
DECENTRALISED The power to make decisions is
devolved, or given to the smaller parts of the business.
Potential Advantages: It can led to quick decisions being
made, empowered and motivated staff.
Potential Disadvantages: It can expose the business to
coordination problems and increased costs
TEST YOURSELF Q2