1. Organisational structure
THE TIMES 100

2. Internal structure 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. Workforce roles Leadership & managerial roles include: Supervisors
Have one or more lower grade workers reporting directly to them
Team leaders
Support a group of workers within a firm
Managers
Manage particular areas of a business
Directors
Appointed by shareholders to run the business on their behalf

4. 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

5. Organisation charts 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
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

7. 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

8. 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

9. 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

10. De-layering
De-layering involves removing one or more layers of middle managers
De-layering can:
Cut the costs of paying many managers
Improve communication
Empower the remaining workers if they are given extra responsibilities
Result in a loss of experienced, skilled managers

11. 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

12. 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 use their skills and abilities better
Split loyalties as workers have both project team leaders and their functional managers
Administration of matrix management can be more expensive

13. Centralisation
Authority for decision-making remains with senior managers
Benefits of centralisation
Drawbacks of centralisation
Firms can benefit from economies of scale
Local differences may not be taking 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 de-motivated

14. Decentralisation
Authority for decision-making is delegated down the hierarchy
Benefits of decentralisation
Drawbacks 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

15. Flexible workforces Flexibility can be gained by using:
Core & peripheral workers
Outsourcing
Home-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

16. Organisational structure in context

17. Decentralisation at LSC
The Legal Services Commission helps people access legal aid in England and Wales. Until recently, each of its 13 regional centres had its own HR manager and an adviser. Use the LSC case study to identify the problems that this decentralisation caused.
Staff had interpreted HR policies in different ways leading to variable outcomes
Unfair practices were reported e.g. Some areas allowed variations to the official flexitime policy while others did not
There were more HR staff in the Commission than other similar sized organisations

18. Decentralisation at LSC
Why does the LSC continue to maintain some of its HR services at the separate regional offices? Use the LSC case study to help you
Services which require local expertise in order to respond to local needs have been maintained at regional level e.g. local managers have an input into the recruitment plans for their own regional offices.

19. Centralisation at the LSC
The LSC has centralised a number of HR activities. What improvements have resulted that benefit the staff, the public and the whole organisation? Use the LSC case study to help you
Benefits include:
HR Business Partners spending more time on long-term planning and decision making rather than routine tasks such as form filling
Systems are more consistent through the organisation and waste has been reduced
Employees can carry out some administration tasks for themselves through an online system
The structure is flexible so it can take on additional work when required

20. Managing changes in the structure
There is often resistance to change in the workplace. What process did the Legal Services Commission go through to ensure the change went smoothly? Use the case study to help you
A cyclical process was adopted:
Identify drivers for change
Plan for change. Communicate and inform all those involved.
Implement the change
Evaluate the outcomes and modify if necessary
Review and plan for the next improvement

21. Useful resources
Organisational structure lesson suggestions and activities (The Times 100)
Legal Services Commission case study (The Times 100)
Legal Services Commission website