1. S3 Business Management
Unit 1.3

2. DEFINITION OF AN ORGANISATION CHART
chart “shows the
structure of a
business”

3. A TYPICAL ORGANISATION CHART

4. DEFINITION OF AUTHORITY
Authority means “the
power or ability to
influence and control
others”.

5. DEFINITION OF RESPONSIBILITY
means “ the duty
an employee has to
carry out their
work”

6. WHAT IS SHOWN BY AN ORGANISATION CHART?
1. Management structure and
main departments
2. Lines of responsibility
3. Lines of authority
4. Lines of communication
5. Positions of employees including names, job titles
6. Reporting structure
7. Number of people who are
accountable to each manager

7. DEFINITION OF ACCOUNTABLE
Accountable means
“being responsible to
someone i.e manager
for some action taken”

8. WHO USES AN ORGANISATION CHART?
Visitors to the organisation
New members of staff
Existing members of staff
Receptionist

9. ADVANTAGES & DISADVANTAGES OF ORGANISATION CHARTS
Visitors - see the size of the organisation and where each person fits in.
New staff - find out about other staff in their department and the whole organisation
Existing staff - can see staff in each department and who to contact.
Disadvantage:
Becomes out of date quickly as staff may leave, new staff join and/or existing staff get promoted.

10. Advantages of An Organisation Chart to Employees
Can immediately see the overall size and structure of the organisation (how the various sections are grouped and the main areas of work of departments/sections).
Can see at a glance the reporting structures and lines of communication within the organisation
Can see the number of people who are accountable to each senior manager
Can immediately see the relationship of the departments and managers within the org.
Are made aware of the range of activities undertaken by the organisation.

11. What is the usual shape of an organisation chart?
An organisation chart is usually shaped like a pyramid with a few senior or high status posts at the top of the pyramid, with a greater number of lower status posts at each levels below. In a pyramid (or hierarchical) structure, posts with the same level of authority/responsibility are shown on the same level.
Chief
Exec
Directors
Senior Managers
Managers
Junior Managers
Supervisors
Assistants

12. Organisational Structures
A pyramid structure with many levels of posts is known as a tall structure. In recent years there has been a move towards removing certain levels of management posts (known as delayering). This has resulted in flatter structures. Delayering an organisation will lead to more posts at each of the remaining levels.

13. Features of a Tall Structure (Pyramid)
There are usually many levels of management
Managers will usually have narrow spans of control
Management posts tend to be specialised

14. Advantages of a Tall Structure
It should be easier for managers to supervise staff
There are likely to be many opportunities for promotion
Employees are more likely to know their immediate boss
Employees are more likely to know the scope of their duties and responsibilities

15. Disadvantages of a Tall Structure
Employees feel undervalued and far removed from the real decision-making
Employees may not get the opportunity to suggest ideas and show initiative
Decision-making may be slow
It may take time to communicate decisions throughout the organisation
The management structure may be costly with many levels of highly-paid posts
May lead to complicated channels of communication with very formal procedures

16. Features of a Flat Structure
Fewer layers of management
More modern structure
Usually as a result of delayering

17. Advantages of a Flat Structure
Employees are given more authority and responsibility - they are likely to feel more motivated.
Employees are more likely to be able to show initiative
Employees are more likely to be less complicated and less formal - communication is less likely to be more efficient
Should take less time to reach decisions and for the organisation to react to situations
Should take less time to communicate decisions throughout the organisation

18. Disadvantages of a Flat Structure
Workloads of employees are likely to increase - possibility of stress
Employees may need training to carry out new/wider responsibilities
Where the span of control is too wide, employees may feel isolated or ignored
Employees may not be able to meet with their line manager on a regular basis
Likely to be fewer opportunities for promotion to management posts

19. What are the main types of relationship within an organisation?
There are 2 main types of relationship within an organisation:
Line Relationship
Lateral Relationship

20. Line Relationship Line Relationship Line Relationship
These exist between line managers and the staff immediately below them. Members of staff are accountable to their line manager for any actions or decisions they take. Line relationships are shown by the vertical lines on an organisation chart and stretch down through the whole organisation.
Line Relationship
Line Relationship

21. Lateral Relationship Lateral Relationship
These exist between employees who are on the same level and who report to the same line manager. The employees cannot give instructions to each other or to staff outwith their own spans of control.
Lateral Relationship

22. SG Business Management
Marketing - Unit 1.3
SG Business Management

23. What is marketing?
Marketing is the process of learning about your customers and competitors, so that you can provide the right products at the right price in the right place, promoted in the right way to achieve your business objectives.

24. Marketing involves the following range of activities:
Knowing about the product or service and its market
Knowing what to produce
Knowing how much to charge
Knowing how to persuade people to buy it
Knowing where to sell it
Knowing how to get the best mix of these
Knowing how to deal with customers

25. The Marketing Mix:
Product
Price
Promotion
Place

26. What is market research?
Market research gathers information about consumers, competitors and distributors wihtin a firm’s target market. It is a way of identifying consumers’ buying habits and attitudes to current and future products.
Market research can be numerical (such as what proportion of year olds by The Sun every day?) or psychological (why do they buy The Sun).

27. How is market research carried out?
The following research techniques are commonly used:
- Desk Research
- Field Research

28. Desk Research
Desk research involves the use of existing information from: - government statistics, for example from the Census which is carried out every 10 years:
Newspapers
Magazines
Published market research information – reports in various journals showing trends in a range of markets for different products.

29. When should Desk Research be used?
When market information already exists.
When it is cheaper to access existing information rather than generate new information.
When it is easier to access – saves time.

30. Field Research Field Research can be carried out through:
- the use of questionnaires – set questions are asked, face-to-face/by telephone/by post.
- Test Marketing – try out the product on a small section of the market
- Consumer panel – a group of people are given a product and asked to comment on it in detail.

31. Field research is undertaken when:
Information is to be gathered for a specific purpose.
Information is to be linked directly to a product/service.
Research is to be focused on a particular company’s needs.