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Summary of organisational design
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Simple but detailed summary of how businesses have different organisational designs and how it benefits them
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Organisational designWHAT IS AN ORGANISATIONAL STRUCTURE?
- Shows hoe people and management are organised in business:
Authority and responsibility
Individual job roles and titles
The people whom others are accountable
The formal routes through which communication flows in the
business
FACTORS AFFECTING THE ORGANISATIONAL STRUCTURE:
- Size of the business
The larger the business, the more positions are needed
- Type of business
Limited companies will likely have more employees
- Management and leadership style
If the leader is autocratic, the dynamic would be different
- The competitive environment
Change in developments in the market
KEY TERMINOLOGY:
- Spam of control
The number of employees for whom a manager is responsible
- Hierarchy
Span, but vertically
Narrow Wide
Allow for closer supervision of Gives subordinates the chance for
employees more independence
More layers More appropriate if labour costs
Helps communication are significant - reducing the
number of managers
SPAN OF CONTROL:
- Span of control depends on:
Personality and skill / experience of the manager
Size and complexity of the business
Whether the business is centralised or decentralised
The extent of use of clear objectives throughout a business
CHAINS OF COMMAND:
- The chains of command describes the lines of authority within a
business.
- Example: the CEO reports to managers and they report to workers
, LEVELS OF HIERARCHY:
- The number of layers of management or supervision in the
organisation structure.
- Anything from 4 or more layers will be tall, less than that will be flat.
HIERARCHAL STRUCTURES:
- Traditional form of organisational structure in business
- Layers of hierarchy reflect levels of seniority
- Tall or flat? Depends on number of layers
- Associated with formal or bureaucratic management
WHAT IS DELAYERING?
- Delayering is removing layers of management from the hierarchy of
the organisation.
- Benefits:
Improves communication
Lowers labour costs
Reducing the number of layers in the hierarchy
Other perceived benefits:
- faster decision making
- shorter communication paths
- stimulating employee innovation
Also associated with:
- widening spans of control
- Greater emphasis on teamworking and empowerment
- Drawbacks
Reduces labour productivity
People may get made redundant
Less promotional opportunities
DELEGATION:
- The assignment to others of the authority for particular functions,
tasks, and decisions.
ISSUES WITH DELEGATION:
- Advantages are as follows:
Reduces management stress and workload
Allows senior management to focus on key tasks
Subordinates are empowered and motivated
Better decisions or use of resources (potentially)
Good method of on-the-job training
- Disadvantages are as follows:
Cannot / should not delegate responsibility
Depends on quality / experience of subordinates
Harder in a smaller firm
May increase workload and stress of subordinates
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