1. IB Business and Management
2.2 Organisational Structure

2. Discuss different types of organisation structure
Open 2.2 Outline
Today’s objectives:
Examine job roles
Discuss different types of organisation structure

3. Organisational Structure
Refers to the ways that businesses organise their human resources (employees)
As businesses grow there is a growing need for the structure to be formalised

4. Other Employees (Operatives)
Company Hierarchies
CEO/MD
Board of Directors
Management
Supervisors
Other Employees (Operatives)
Senior management
Pay and Authority
Middle management
Junior management

5. CEO/MD CEO/Chairperson: Responsible for day-to-day operations.
Leads & represents the board.

6. Board of Directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization on behalf of the shareholders
These directors could include:
A Chief Executive Officer (CEO) who may also be Chairman of the Board
Other executives of the organization, such as its Chief Financial Officer (CFO) or Executive Vice President
Large shareholders
Representatives of other stakeholders such as labour unions, major lenders, or members of the community in which the organization is located
Outside directors

7. Board of Directors – Home Retail Group

8. Board of Directors - Roles
governing the organization by establishing broad policies and objectives;
selecting, appointing, supporting and reviewing the performance of the chief executive;
ensuring the availability of adequate financial resources;
approving annual budgets;
accounting to the stakeholders for the organization's performance;
setting the salaries and compensation of company management.

9. Managers
Management: Responsible for a certain task or team of people (HR, finance, marketing, etc.) & day-to-day implementation of organisation’s policy

10. Supervisors
Junior managers who carry out operational decisions & directly contact workforce.

11. Other Employees (Operatives)
Considered the workforce. Cashiers, secretaries, laborers, teachers, etc. Make routine decisions concerning their job only. Provide support to others in organisation & work as member of a team or department.

12. Delegation
Refers to passing authority & control on to others. Manager retains responsibility, but the subordinate does the work. What are the benefits of delegation?

14. Why might a manager be reluctant to delegate?

15. Organisational Charts
Most businesses create a formal, organized structure to delineate accountability & responsibility
Accountability: shows who answers to whom
Responsibility: shows who is in charge of whom

16. Organisation Chart Terminology
Person directly above an employee is known as the line manager.
The people who a manager has direct control over is called a subordinate.

17. Organisational Chart Shows 4 important features:
Functional departments within a business (marketing, finance, etc.)
Chain of command: which people have authority over others
Span of control: number of subordinates directly accountable to a single manager
Official channels of communication: route that messages are to be communicated within an organization

18. Organisational Chart Example

19. Span of Control Is described as either being:
Wide = Each manager has lots of subordinates
Narrow = Each manager has few subordinates

20. Task
Group A:
Think of advantages and disadvantages of a Wide Span of control
Group B:
Think of advantages and disadvantages of a narrow span of control

21. Chain of Command
Refers to the formal line of authority through which orders are passed down in an organization.
Flat organization = short chain
Tall organization = long chain

22. Task – In groups I will show a picture to one person in your group
They then have to re-draw it for the next person
etc

23. Organisational Chart Example

24. Task
Spurs Mystery
Use the information and draw the firm’s organisation chart

25. Task BISS organisation chart
Who fills the positions in the organisation chart
How has the structure of the school changed since this chart was drawn up? Why?

26. Flat and Tall Structures
Depending on how the business is organised, a business can have a tall or a flat structure.
Consider the example of an organisation with 52 workers

27. Tall Structure MD Finance Manager Finance Supervisor
3 Finance Assistants
Accounts Manager
4 Accounts Clerks
8 Data Entry operators
Human Resource Manager
Training Manager
2 trainers
Marketing Manager
2 Marketing Supervisors
4 marketing Assistants
Operations Manager
3 Shop Floor Supervisor
18 shop floor workers

28. Human Resource Manager
Flat Structure MD
Finance Manager
18 Finance Assistants
Human Resource Manager
3 trainers
Marketing Manager
6 marketing Assistants
Operations Manager
21 Shop Floor Workers

29. Questions – Discuss and decide
Which type of organisation (flat, tall, wide, narrow) will:
Have good opportunities for promotion
More likely to have stressed managers
Have quick vertical communication
Workers may feel over supervised
Workers may be delegated additional responsibilities
Problems spotted on the shop floor will be dealt with quickly by management
Likely to be large organisations
Workers may feel unsupported
Response to problems may be slow

30. Factors Affecting Choice of Structure
Business size (larger firms require a more formal structure and are likely to be tall)
Employee competence (business with highly skilled workers can have flat, informal structure)
Management Attitudes (managers that trust their staff are more likely to have a flat, flexible structure)
History & culture (innovative firms accustomed to change may opt for more flexible structure)

31. Changing/Reorganizing Structure
Delayering: removing one or more levels in the hierarchy in order to flatten out organizational structure (employees are moved around)
Results: reduces the number of layers of management & widens the span of control
Purpose: reduce cost, improve communication speed, give employees more responsibility

32. HIERARCHICAL STRUCTURE
DE-LAYERING
HIERARCHICAL STRUCTURE
Flatter Structure
COMPANY OWNER
Chain of Command
Delegation
MANAGERS
Feedback
DEPARTMENT MANAGERS
SUPERVISORS
SHOPFLOOR WORKERS

33. Advantages of delayering
Reduces costs – wage costs of middle management
Motivates employees lower down the hierarchy by giving them more responsibility, authority and control
Communication may improve, as there are less levels to pass information through
Can produce good ideas from employees who otherwise wouldn’t have a say
Improves responsiveness, as senior managers and customers are closer.

34. Disadvantages of Delayering
Can lessen performance, as knowledge and experience of middle management is lost
Not all organisations suited to a flat hierarchy
Has a negative impact on motivation in the short term – job losses
Disruption period, due to people taking on new responsibilities
Remaining managers have a wider span of control, which means they can lose focus
New responsibilities could mean more stress.

35. Changing/Reorganizing Structure
Downsizing: reducing the size of the workforce (employees are laid off)
Purpose/results: reduces cost
Drawbacks: creates sense of insecurity, can over-stretch employees (decreasing quality of work), can increase decision-making time if teams are larger