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Learning aim B: Investigate how businesses are organised B1 Structure and organisation • Organisational structure, e.g. hierarchical, flat, matrix, holacratic. • Functional/operational areas, e.g. human resources, research and development, sale...
An organisational structure is a system that outlines how the activities are directed in order to
achieve a level of efficiency and effectiveness in order to create an operation where everything
is arranged in a fixed plan.
Organisational structure determines how information flows between levels within the
company. For example hierarchical structure can allow schools to arrange their positions of
people in a high to low power rate scale, where the highest in the hierarchy has the most
power such as governments and head teachers and the lowest level is the staff department
then students. Organisational structure enables decision making power which is distributed
among various levels of the organisation.
Hierarchical organisational structure
Hierarchy structure is where things are arranged in order of the most to the least in which it
includes a clear levelling of power and importance, in a business term it refers to the
arrangement of the individual within the business. A firm's hierarchical structure typically
contains vertical levels going up to the top head i.e. The CEO or Managing Director. An example
of hierarchical structure would be in a business. The person that is the most powerful and
important in the business is the CEO also considered the owner of the business and then
underneath the CEO is Managers that are in production and managers that control marketing
schemes. The production managers are now split in two groups, under nation
managers(production) are Foreman’s which manage the manufacturing and fabrication of the
goods and services and then after the goods that are produced are set to the foramen assembly
in which they check if the product is meeting the safety regulations, they oversee the
manufacturing and construction projects. After the Foremen’s are our workers who are the
least powerful in the business, the role that they play in the business is to complete tasks. The
other manager (marketing) which helps the business in advertising and promoting their goods
and services, and looking at the business sales revenue through statistics gathered they manage
and handle salespersons (employees) and sales officers. After the manager (marketing scheme)
is the sales officer which helps the business develop strategies to increase customer
satisfaction, they drive sales and oversee profit projections for a business. After a sales officer is
a salesperson they are the least powerful in the business, they sell the businesses goods and
services directly through local stores. Overall hierarchy charts allow businesses and other
organisations (schools) to operate in a systemically order in which it ensures that effectiveness
and productivity of the workplace through creating levelling system where everyone knows
where they belong in hierarchy structure
,However there are also drawbacks to using a hierarchical structure such as employees may be
disconnected to the top-level management (CEO and managers) which can lead to cause bad
relationships between managers and employees. Furthermore, this hierarchical organisational
structure leaves little communication between employees causing a lack of team spirit. As a
result, when one of their employees is promoted, others may be envious. They may disagree
with the company's changes and communicate this in an inappropriate manner. Morale in an
organisation will suffer as a result.
Flat organisational structure
A flat organisational structure refers to having a relatively small number of layers in your
company organisational chart. The manager has more responsibility under a flat organisational
structure since the number of individuals directly managed by him is large, and these people at
lower levels rely on him for support, advice, assistance, and direction. This structure is designed
to empower workers so that they may make their own decisions. This form is ideal for small and
new businesses as it is most effective to them as it allows the business to complete task
, productivity and efficiency through following a planned guidance to handle whatever works
that comes their way.
The benefit of using flat organisational structure is that it’s cost efficient. A flat organisational
structure has relatively few managerial layers. It means that the company spends less money
on salaries, perks, and so on for the managerial level. Which will lead the salary-related
expenditures to decrease, enabling the company to save money and put it to better use such as
paying for their utilities and raw materials etc.... Another advantage of a flat structure is it
allows high productivity in the business. High productivity encourages higher effectiveness and
efficiency in the workplace in which decision making is quicker allowing faster workflow in the
business. It enables employees, owners and managers to work to their best ability in order to
maximise efficiency in the company. Ownership and responsibility is high in a flat organisation
structure. However there is also a drawback to using flat organisational structure such as
Employees have a power struggle because they are empowered to make autonomous
judgments, which causes uncertainty since they struggle to submit data because they aren't
properly clarified such as where the data is sent. This further leads to less Motivation to strive
the business towards success as the climb becomes challenging, and employees and the
business as a whole begins to believe that they will never reach the top like other successful
firms, they have very little chance, so thus they remain as a brand that is not widely known in
the general public. Which overall limits their productivity as they believe this is the best we
could have done for the firm.
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