Internal Environment UNIT 3 OUTCOME 2

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2.1 Different management structures KEY CONCEPT A MANAGEMENT STRUCTURE IS THE WAY IN WHICH AN ORGANISATION ARRANGES ITS MANAGEMENT, EMPLOYEES AND RESOURCES IN ORDER TO ACHIEVE ITS OBJECTIVES

Hierarchical organisational management structure Management structure -the way in which management, employees and resources have been arranged, so that the organisation can achieve its objectives. An organisation’s structure is usually represented diagrammatically in an organisational chart. The chart shows the key positions of responsibility and accountability, and lines of communication.

Management Hierarchy Found in many organisations Based on a traditional management hierarchy More authority is given at each higher level of the hierarchy This means senior managers have greater accountability, responsibility and power compared with those at lower levels. They can be visualised as a pyramid

Management Hierarchy

Characteristics of Management hierarchy rigid lines of communication numerous levels of management, from managing director to supervisor clearly distinguishable organisational positions, roles and responsibilities hierarchical, linear flows of information and direction, with a large amount of information directed downwards centralised control with all strategic decisions made by senior management a chain of command showing who is responsible to whom.

chain of command/line authority System that determines responsibility, supervision and accountability of members of the organisation. Advantage - only one person ultimately remains in charge. One disadvantage - information flows only one way, from top to bottom, with little questioning of authority - communication is said to be ‘top down’. Closely related is the principle of unity of command — each employee should report to a single supervisor.

Span of control This refers to the grouping of people and resources into divisions in the large-scale organisation (LSO). This refers to the grouping of people and resources into divisions in the large-scale organisation (LSO). The person in charge of each division within an organisation is called the manager. The person in charge of each division within an organisation is called the manager. A manager’s job is to ensure the division runs smoothly. Included in this task is the manager’s duty to look after the people who work in the division. A manager’s job is to ensure the division runs smoothly. Included in this task is the manager’s duty to look after the people who work in the division. Span of control indicates the number of people for whom a manager is directly responsible. Span of control indicates the number of people for whom a manager is directly responsible.

Identify the chain of command and span of control

Changes in Organisational structures Factors in the external environment have resulted in organisations flattening their structures. This means that there are fewer levels of management and gives greater levels of responsibility to individuals- can adapt quickly because there are fewer managers who need to approve decisions. A flatter structure will emphasise teamwork and shared responsibility for achieving organisational objectives.

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