Presentation on theme: "Organisational Structure This unit looks at the various ways that businesses organize their human resources."— Presentation transcript:
1 Organisational Structure This unit looks at the various ways that businesses organize their human resources
2 Key Topics The formal organization: job roles The formal organization: organizational chartsDelegation and span of controlDelayeringLevels of hierarchyChain of command
3 Why is there a need for a more formal and organized structure? Accountability – shows who is held responsible for what job.Responsibility – shows who is in charge of whom.
4 Formal and Informal Structures Line managementManagerSupervisorChain of commandSpan of controlDepartmentsTeamsInformalAgeExperienceQualificationsPeer groupsFriendship groups‘Floors’
5 Levels of HierarchyThese are the different job titles/roles given to each layer of an organisation and include terms such as:OwnersDirectorsManagersSupervisorsWorkers etcCEOBoard of DirectorsManagementSupervisors and Team LeadersOther Employees
6 Making an organisational chart Task 1: Complete the “roles in the hierarchy” activity, independently then discuss your answers with your neighbourTask 2: Form 2 groups and create an organisational chart for the secondary school using the materials supplied to your group. You have to work fast and beat the other group to it.The buzzer will go in 10 minutes!Task 3: Identify the levels of hierarchy, span of control of all line managers and possible chains of command. Discuss the advantages of such a chart and share with the class.
7 Organisational Charts An organisational chart shows 4 features of a business:Functional departments within a business e.g. Marketing, Finance, HR, ProductionChain of Command - which people have authority over othersSpan of Control – number of staff directly accountable to a single line managerChannels of Communication – route that messages are communicated within an organisation
8 Advantages of charts Shows how everyone is linked Show communication channelsInforms employees as to who is accountable to whomSee your own position in the organisationShows links between departmentsGives a sense of belonging
9 Flat Organisational Structure In this structure there are few layers and tend to describe small businesses such as sole traders/partnerships
10 Flat Organizational Structure --Vertical Structure. Characteristic of decentralized companies with relatively few layers of management and relatively wide spans of controlTypical Law FirmChief PartnerPartnersAssociatesRelatively wide span of control5 - 10
11 Tall or Hierarchical Organisational Structure A tall or hierarchical structure is one which has many levels/layers.It tends to describe larger businesses such as Ltds and PLCs
12 Tall Organizational Structure -Vertical United States ArmyGeneralColonelsCharacteristic of centralized companies with multiple layers of management and relatively narrow spans of controlMajorsCaptains & LieutenantsWarrant OfficersRelatively narrow span of control.SergeantsCorporalsAt lower levels, where tasks are similar and simpler, span of control widens.Privates5 - 12
13 Now create another chart using the US army ranks issued to you. Compare it with the BISS chart you created earlier with relation to the key terms learnt in this topic.
14 Different method of Departmentalization Process of grouping jobs into logical unitsCustomer Departmentalization Departmentalization according to types of customers likely to buy a given productProduct Departmentalization Departmentalization according to specific products being createdProcess Departmentalization Departmentalization according to production processes used to create a good or service
15 Departmentalization Geographic Departmentalization Departmentalization according to areas served by a businessFunctional Departmentalization Departmentalization according to groups’ functions or activities
16 Multiple Forms of Departmentalization PresidentVice PresidentMarketingProductionFinanceFunctional DepartmentalizationTexas PlantManagerOregon PlantFlorida PlantGeographical DepartmentalizationConsumerProductsIndustrialProduct Departmentalization6 - 16
17 DelegationDelegation is when authority (and sometimes responsibility) for a task/activity is handed down from superior to subordinateYou need to understand how delegation can cloud the issue of ‘accountability’TaskDescribe a situation where delegation is essentialDescribe a different situation where delegation would be disastrous
18 Fear of DelegatingMany managers actually have trouble delegating tasks to others.This is especially true in small businesses where the owner-manager started out doing everything.
19 Why do some small business managers have trouble delegating effectively? They feel that employees can never do anything as well as they can.They fear that something will go wrong if someone else takes over a job.They lack time for long-range planning because they are bogged down in day-to-day operations.They sense they will be in the dark about industry trends and competitive products because of the time they devote to day-to-day operations.
20 What can small business managers do to delegate effectively? Admit that they can never go back to running the entire show and that they can in fact prosper— with the help of their employees.They must learn to let go.
21 Four reasons some managers in big companies don’t delegate as much or as well as they should: They fear that subordinates don’t really know how to do the jobThey fear that a subordinate might “show the manager up” in front of others by doing a superb jobThey desire to keep as much control as possible over how things are doneThey simply lack the ability to effectively delegate to others
22 How can managers in big companies learn to delegate more effectively? All managers should recognize that they can’t do everything themselves.If subordinates can’t do a job, they should be trained so that they can assume more responsibility in the future.Managers should recognize that if a subordinate performs well it also reflects favorably on the manager.A manager who simply doesn’t know how to delegate should seek specialized training in how to divide up and assign tasks to others.
23 Matrix StructureA matrix structure refers to the flexible organisation of employees from different departments temporarily working together on a particular project.
24 Centralized Structure Vast majority of decision-making is performed by a very small number of peopleConsIncrease pressure/stress for decision makersInflexibilityDemotivationBottleneck if many decisions to be madeProRapid decision makingBetter controlBetter sense of direction
25 Decentralised Structures Some decision making authority and responsibility is passed onto others in the organisation.ProInput from workforceSpeedier day-to-day decision makingHigher moraleImproved accountabilityEncourage teamworkConsLoss of controlGreater chance of mistakesGreater reliance on effective communicationDuplication of functions
26 Flexible Structures Henry Mintzberg p221 Mintzberg came up with 6 organisational configurations:InnovativeEntrepreneurialMachineDivisionalisedProfessionalMissionaryAll can be evident in an organisation, but one is likely to dominate.
27 Flexible Structures Henry Mintzberg (cont) Minztberg also argued that:Different organisational configurations to suit different businesses.For any structure to work effectively, employees must believe in the organisation's common values (ideology).A business can only remain successful if its organisational structure is flexible.
28 Flexible Structures Tom Peters Argued that:Flatter organisational structure are more successful since:Better channels of communicationGreater opportunities for delegation and empowermentGreater flexibility in adapting to changeKey features of successful companies (researched 43 highly successful companies)Motivated workforceRemoval of bureaucracy leading to greater flexibilityUse of project teams (matrix structures) leading to more innovative and creative ideas being generated
29 Changes in StructuresOrganisations can change their internal structure by:Moving from a flat to a tall structureMoving from a tall to a flat structureMoving to a matrix structureOrganisations can change their external structure by:Changing business structure
30 Outsourcing, Offshoring and Migration Outsourcing – this is when a business recruits another business or group of employees to carry out work for them (example)Offshoring – this is when parts of a business or a group of employees are based overseas (example)Migration of HR – this is similar to offshoring but is when the whole of the HR department are based overseas (example)
31 Matching Activitythe number of subordinates working under a supervisorthe way authority and powers are passed down in a businessthe execution of tasks that are governed by official administrative and formal rules of an organisation aka “red tape”this exists when a small number of managers/leaders have all of the authoritythis exists when many workers have a degree of authorityrefers to the diagrammatic representation of a firm’s formal organisational structureis the process of removing one or more levels in the hierarchy in order to flatten out the organizational structure.DelayeringChain of commandCentralisationOrganisational ChartBureaucracySpan of controlDecentralisation