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Organisational Structures
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What this topic is all about
Organisational Structures What this topic is all about The types of organisational structures Hierarchies, spans of control, workloads, job allocations and delegation Organisational structures and business performance
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What this topic is all about
Organisational Structures What this topic is all about Some strange new terms: Chain of command Retrenchment Line manager Gardening leave Authority Sinecure Hierarchy Downsizing Organisation chart Dead mans shoes Delegation Let go Subordinate Ivory tower Delayering Grape vine Span of control Water cooler Channels of communication Team building Centralisation (de-) 3
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The organisation chart
Organisational Structures The organisation chart Simplest way to show how a business is organised is to look at an organisation chart Shows the management hierarchy Also illustrates: Span of Control Levels of authority Chain of command Official channels of communication
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Organisational Structures
Managing Director Marketing Director Marketing Managers Sales Teams Finance Director Finance Supervisors Accounts Assistants Operations Director Production Team Leaders Production Team Members HRM Director Personnel Manager
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Video Time
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Organisational Structures
Span of Control The span of control is the number of employees for whom a manager is directly responsible
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Organisational Structures
Wide Span of Control Manager Assist 1 Assist 2 Assist 3 Assist 4 Assist 5 Assist 6 Assist 7 Span of control = 7
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Organisational Structures
Narrow Span of Control Director Manager 1 Manager 2 Manager 3 Span of control = 3
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Narrow or Wide Span of Control?
Organisational Structures Narrow or Wide Span of Control? Narrow Wide Allows for close supervision of employees Gives subordinates the chance for more independence More layers in the hierarchy will be required Reduces number of managers – reduces costs Produces more effective communication
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Span of Control affected by:
Organisational Structures Span of Control affected by: Personality, skill, experience of the manager Size and complexity of the business Whether the business is centralised or decentralised The extent of use of clear objectives throughout a business
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Span of Control
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The chain of command is the line of authority within a business
Organisational Structures Chain of Command The chain of command is the line of authority within a business
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Chain of Command - Example
Organisational Structures Chain of Command - Example Sam Brown Eve Silver Chris Gold Brenda White Sharon Black Dawn Grey The organisation chart opposite shows that Sam is responsible for Eve, Chris and Brenda. Further down the chain, Brenda is responsible for Sharon and Dawn
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Organisational Structures
Levels of Hierarchy The number of layers of management or supervision in the organisation structure
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Hierarchical structures
Organisational Structures Hierarchical structures Layers of hierarchy reflect levels of seniority Tall or flat? Depends on number of layers Most business organisations are organised hierarchically Associated with formal or bureaucratic management
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Organisational Structures
Tall Hierarchy CEO Marketing Mgrs Team Sup Team Ldrs Staff Finance Ops HRM This hierarchy has six levels = tall
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Organisational Structures
Flat Hierarchy CEO Marketing Team Leaders Team Members Finance Ops HRM Members This hierarchy has four levels = flatter
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Common Types of Organisational Structure
Organisational Structures Common Types of Organisational Structure Tall structure Sometimes called a traditional or mechanistic structure Many layers in hierarchy with narrow spans of control Flat structure Sometimes called “organistic” Wide spans of control Delegation encouraged
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Organisational Structures
Tall Structure Senior Management Layers of Management or Supervision Shop-floor employees
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Comments on Tall Structures
Organisational Structures Comments on Tall Structures Key features – many layers of hierarchy, narrow spans of control Allows tighter control (less delegation) More opportunities for promotion Takes longer for communication to pass down the layers More layers = more staff = higher costs
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Organisational Structures
Flat Structure Senior Management Layers of Management or Supervision Shop-floor employees
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Comments on Flat Structures
Organisational Structures Comments on Flat Structures Key features – few layers of hierarchy, wide spans of control Less direct control, more delegation Fewer opportunities for promotion, but staff given greater responsibility Vertical communication is quicker Fewer layers = less staff = lower costs
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A break to a different voice!
Organisational Structures A break to a different voice! organisational structure - advanced jaslocombe 24
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Removing layers of management from the hierarchy of the organisation
Organisational Structures What is Delayering? Removing layers of management from the hierarchy of the organisation
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Delayering – good points (bad?)
Organisational Structures Delayering – good points (bad?) Main benefit is lower labour costs Other perceived benefits Faster decision making Shorter communication paths Stimulating employee innovation Also associated with Widening spans of control Greater emphasis on teamworking and empowerment
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Organisational Structures
Delegation The assignment to others of the authority for particular functions, tasks, decisions
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Key Issues with Delegation
Organisational Structures Key Issues with Delegation Advantages Reduces management stress and workload Allows senior management to focus on key tasks Subordinates are empowered and motivated Disadvantages Cannot / should not delegate responsibility Depends on quality / experience of subordinates Harder in a smaller firm May increase workload and stress of subordinates
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Organisational Structures Giving employees the power to do their job
Employee Empowerment Giving employees the power to do their job
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Organisational Structures
Empowerment Concept closely linked to motivation Employees like to feel that their actions count Empowerment is a catch-all term that covers: Giving authority to make decisions to front-line staff (e.g. hotel receptionist, call centre assistant) Encouraging employee feedback Showing more trust in employees
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Changing the Organisational Structure
Organisational Structures Changing the Organisational Structure Why change? Business growth means formal structure is appropriate Reduce costs, conflicts Employee motivation needs boosting Downside … Manager and employee resistance Disruption and demotivation = staff retention problems? Costs (e.g. redundancies) Negative impact on customer service or quality
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Common Workforce Roles
Organisational Structures Common Workforce Roles Directors Managers Team Leaders Supervisors
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Organisational Structures
Roles - Directors In overall charge of the business Appointed by shareholders Responsibility for business functions Marketing Finance Operations HRM Close day-to-day involvement in small/medium sized businesses Directors
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Organisational Structures
Roles - Managers Report to Directors Responsible for specific departments / activities Oversee budgets Have responsibility for their functional areas May delegate tasks to subordinates Managerial styles will vary Managers
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Roles – Team Leaders / Foreman
Organisational Structures Roles – Team Leaders / Foreman Tasked with ensuring that teams of employees work well together Team leader: Allocates workload & jobs between the team members Manages team resources Focuses on quality & team motivation Team Leaders
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Organisational Structures
Roles – Supervisors Common role in a tall hierarchy Responsible for allocating jobs to subordinates Traditional activities: Checking quality (quality control) Organising staff Maintaining discipline Supervisors
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What this topic is all about
Organisational Structures What this topic is all about Some strange new terms. Still strange? Chain of command Retrenchment Line manager Gardening leave Authority Sinecure Hierarchy Downsizing Organisation chart Dead mans shoes Delegation Let go Subordinate Ivory tower Delayering Grape vine Span of control Water cooler Channels of communication Team building Centralisation (de-) 37
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Test Your Understanding
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Test Your Understanding
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Improving Organisational Structures
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