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P4; explain how their style of organisation helps them to fulfil their purposes
Organisational Structure
There are two main purposes for the existence of an organisational structure. It exists to ensure
work is delegated specifically to specific people; division of work in order for a business to run
efficiently. The length of line of control also determines how responsive a firm is to a change, lines of
communication are the routes messages travel along.
There are a total of four different organisational structures; Functional, Geographic, product & type
of customer. A Functional structure is set up so that each portion of the organisation is grouped
according to its purpose, each department can rely on the knowledge of its workers. A Geographical
structure allows for each business unit to operate as its own entity based on where it’s located. A
Product organisational structure is a structure which involves many products available. A Customer
organisational structure is based upon specific customer expectations.
Cascading Objectives
When an objective is set by a business, it is cascaded
down into objectives which are set out for individuals.
This image illustrates objectives that have been cascaded
in order to meet the initial overall objective. The main
objective is determined and is delegated to other parts
of the department, other departments must work upon
their own objectives or delegate more objectives to
others.
In order to cascade objectives, they must be divided into four separate objectives; Corporate
Objective, Functional Objective, Team Objective and Individual objective.
Corporate Objective; A corporate objective is set mainly by the owners, an example is, to the
increase the profits of the business by 5% in the next trading period (next year).
Functional Objective; this is when each department below the owners set out the objectives in order
to make it more relevant to their sector of the business, an example would be, Sales department
team should increase their profit generated by 5% in the next term.
Team Objective; Teams within departments would set themselves similar small realistic, a group
within the department will all reach the same objective, for e.g. each team within each department
must generate enough revenue to attain 5% profit.
Individual Objective; Each individual must set themselves SMART objectives, for e.g. Must make
enough sales to receive 5% profit.
Functional area in business consists of 6 groups; finance, marketing, production, customer service,
sales and human resources.
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