1. Organisational structure

2. Internal organisation of firms In small firms: Each worker may undertake a range of roles The structure may be informal and fluid As firms grow bigger: The roles and responsibilities of each worker must become clearer A more formal structure is necessary

3. Functional areas A function is the specific job of a person or department. The main functional areas in organisations are: Finance Human resources Sales & marketing Production and operations

4. Organisation structure Organisation charts - pictorial representations of the job roles and lines of responsibility within a business. Hierarchy – an organisation structured in layers, with those at the top having greater authority than workers in lower levels

5. An organisational chart Board of directors HR Manager 4 HR Officers Finance Manager 6 Accounts Clerks Operations Director Factory A Manager 3 Quality controllers 20 Factory workers Factory B Manager 2 Quality controllers 15 Factory workers Marketing Manager 8 Sales Reps

6. Organisation structure Span of control – the number of workers one manager is directly responsible for Chain of command – the line down which instructions are passed through the layers in the hierarchy

7. Tall organisations These have: Many layers Small spans of control Characteristics of tall organisations: High levels of control (appropriate for unskilled workers) More opportunities for promotion Poor communication as information has to pass through the many layers

8. Flat organisations Flat organisations have: Few layers Large spans of control Characteristics of flat organisations: Low levels of control (suitable for skilled, experienced & motivated workers) Better communication Managers must delegate work due to larger spans of control, motivating employees

9. Delayering Delayering involves removing one or more layers of middle managers Delayering can: Cut the costs of paying many managers Improve communication Empower the remaining workers if they are given extra responsibilities X Result in a loss of experienced, skilled managers X Be costly initially in terms of redundancy and training

10. Matrix structures Matrix structures use a project based approach to organisational design Project teams are made up of representatives from the different functional areas Matrix teams run alongside the traditional functional structure

11. Matrix structures Advantages of matrix structures Drawback of matrix structures Staff from all departments can work on the project, leading to quick decision making Workers may be able to better use their skills and abilities Split loyalties as workers have both project team leaders and their functional managers Administration of matrix management is expensive

12. Centralisation Authority for decision making remains with senior managers Benefits of centralisationDrawbacks of centralisation Firms can benefit from economies of scale Local differences may not be taken into account Ensures the activities throughout the business fit with the organisation’s objectives Employees cannot use their knowledge of working at the ‘coalface’ Quick decisions can be made by managers who are skilled at decision making Workers may become demotivated

13. Decentralisation Authority for decision making is delegated down the hierarchy Benefits of decentralisationDrawbacks of decentralisation Staff are empowered to make decisions which may be motivating A consistent corporate message may not be delivered throughout the firm Local conditions can be considered when making decisions Fewer chances of benefiting from economies of scale The experience of all workers is utilised Workers down the hierarchy may be less skilled at ‘decision making’

14. Flexible workforces Flexibility can be achieved using: Core & peripheral workers OutsourcingHome working Core workers: Usually full time and permanent Know the firm well Typically managers & specialists. Peripheral workers: Bought in only when needed Employed on a temporary basis Business functions are provided by other specialist organisations e.g. cleaning firms. May be more cost effective than carrying out these functions in- house. Employees work from home Usually relies on the use of advanced technology and communication Provides flexibility to both workers and their employers

15. Culture Culture refers to the typical way of working within an organisation as demonstrated by the behaviours of the people that work for it An organisation’s culture is influenced by the structure of the organisation

16. Types of business culture CultureCharacteristics Power culture Power is held by a small number of people Swift decisions are made Role culture Highly structured and defined roles May be bureaucratic and lack creativity Task culture Based on team-working within groups set up for a particular task Can respond quickly to changing environment Person culture Trained workers are given the freedom to share knowledge and expertise Entrepreneurial culture Encourages risk taking and creativity Failure is often accepted and learned from

17. Teamwork

18. Importance of teamwork Teamwork can: Increase labour productivity Encourage innovation Improve employee commitment and motivation Increase quality Lower absenteeism and labour turnover

19. Formal and informal teams Formal groups are developed to meet given organisational objectives. Members have defined roles and there will be a leader. Informal groups are based on the relationships between group members. They are concerned with social and psychological needs rather than business objectives. Informal groups may provide support for formal groups.

20. Characteristics of effective teams Effective teams are likely to display the following characteristics:  Clear, shared goals  Defined roles  Open and honest communication  Mutual trust  Effective decision making  Balanced participation and leadership  Co-operation  Ways of managing conflict

21. Effectiveness of teams The effectiveness of a team can depend upon: The skills and abilities of the team members The size of the group The task to be undertaken

22. Belbin’s team roles Belbin identified a number of roles of team members:  Plant – creative problem solver  Resource investigator – extrovert and enthusiastic  Co-ordinator – mature and good delegator  Shaper – dynamic and driven  Monitor-evaluator – strategic thinker  Team worker – co-operative and calming  Implementer – reliable and efficient  Completer – conscientious perfectionist  Specialist – provides knowledge and skills