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Summary Business Studies 9609 "7 Human Resource Management"
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Notes on A-level Business Studies syllabus on point 7 "Human Resource Management"
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Cambridge international AS and A level, Business, Malcolm Surridge and Andrew Gillespie
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HUMAN RESOURCEMANAGEMENT
7.1 Organisational structure
7.1.1 The relationship between business objectives and
organizational structure
The purpose of an organisational structure such as exibility meeting the
needs of the business, allowing for growth and development and
encouraging intrapreneurship
Most business structures are based on departmental lines which are further divided according
to their function or type of work carried out.
Having an organisational structure can be important to:
• Indicate who has overall responsibility over decision making
• What are the formal relationships between people and departments, Who is my line manager?
• How accountability may be passed down the organisation (chain of command)
• Number of subordinates reporting to each more senior manager
• Formal channels of communication (vertical and horizontal)
The internal structure of a business should be designed to help achieve its objectives. The
divisions of responsibilities change in di erent circumstances:
• New competitors enter the industry: more competitive markets will demand a quicker acting
and more exible structure in order of being responsive to meet changing conditions. This will
allow meeting the needs as they might change over time.
• The business grows and develops: as a business grows and expands the internal structure
must change, perhaps on a small business another manager or supervisor might be required.
The organisational structure will therefore change with the size of the business and the range of
activities it is involved in.
• Business objectives change: if the new objective become making innovative products, the
business might need a R&D department.
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fl ff fl
, • Intrapreneurship is being encouraged: entrepreneurship shown inside a business, the
business might want this to have more innovation and a competitive advantage. The structure
must change to have di erent teams/ task forces, higher levels of delegation and trust and more
exibility.
7.1.2 Types of structure: functional, hierarchical ( at and narrow),
matrix
The advantages and disadvantages in di erent types of structure
Functional Structure - structure where the organization groups employees according to
specialized or similar set of roles or tasks. This structures operate well in stable environments
where business strategies are less inclined to changes of dynamism, bureaucracy decreases
the speed of decision making and adapting too changes. This structure has several
advantages and disadvantages:
Advantages of functional structure Disadvantages of functional structure
High level of departmental loyalty and pride for Does not allow for good connections between
work of department departments, vertical hierarchies
Encourages employees to become specialists, Communication between departments can be
increasing ef ciency and productivity dif cult
Department led by manager who are specialists Employees may feel remote from senior
in that area management
There might be competition between
departments, may not bene t organisation
Hierarchical structure: di erent layers of the organisation with fewer and fewer people at each
higher level, generally the structure is presented as a pyramid. The main features are chains of
command, levels of hierarchy and span of control:
• Chain of command: normally instructions are passed down
the hierarchy, information is then sent upwards. The taller the
organization, the longer the chain of command.
• Span of control: this can be either wide (manager directly
responsible for many subordinates) or narrow (manager has
direct responsibility for few subordinates)
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, • Levels of hierarchy: each level represents a grade rank or sta . Lower levels are subordinates
and higher are superiors.
Having a wide span of control on a at structure has several bene ts such as; each worker is
delegated more authority (no manager responsible for many employees), more employee
empowerment, better communications, few levels means less managers consequently
reducing costs.
Advantages of a hierarchical structure disadvantages of a hierarchical structure
Role of each individual in the hierarchy is clear One way communication (top to downwards) is
and well de ned a standard practice, which may be inef cient
Decision making starts at the top but may be No links horizontal links between the
passed down to lower levels. departments. Leads to lack of coordination
between them
Managers have a narrow vision, not encouraged
to look other way rather than the department
they are in.
In exible and often resisting to change
Matrix structure: structure that
aims to eliminate problems
associated with hierarchical
structure. Matrix cuts
departmental lines and creates
project teams made up of
people from all departments
and divisions. Is a task/project
focused and gathers a team of
specialists, emphasizing right
individual's ability to contribute
to the team.
Advantages of a matrix structure disadvantages of a matrix structure
Allows good communication between all Less control from senior managers as teams are
members of the team empowered on decision making
It gives an englobed vision, it does not focus on Reduced bureaucratic control may be resisted
just what is good for the department. by some senior managers
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