Reorganising Organisational Charts And Management Hierarchies
Specification:
4.1 Reorganising Organisational Charts and Management Hierarchies • internal organisational structures • appropriateness of centralisation/ decentralisation for growing businesses |
Candidates should be familiar with internal
organisation structures, organisation trees, and layers of management. Candidates should understand the term ‘span of control’. They should be aware of the effect that the shape of the organisational structure has on how the organisation is managed. Candidates should be familiar with the concepts of centralisation and decentralisation and the benefits and challenges that both can bring to a business. |
Learning Objectives:
- To understand what an organisational structure is (D-E)
- To be able to analyse the advantages and disadvantages of flat and tall structures (B-C)
- To be able to evaluate which is the best organisational structure for a business (A*-A)
- To understand what an organisational structure is (D-E)
- To be able to analyse the advantages and disadvantages of flat and tall structures (B-C)
- To be able to evaluate which is the best organisational structure for a business (A*-A)
Starter Activity:
organisational_structures_worksheet.docx | |
File Size: | 259 kb |
File Type: | docx |
What is an organisational structure?
It shows how RESPONSIBILITIES in a business are DIVIDED up amongst different departments and people. It shows people INSIDE and OUTSIDE of the business the different job roles for all employees. It shows who is RESPONSIBLE for whom.
- What are the spans of control (number of employees managed by a manager) here?
- What are the levels of hierarchy/layers of management here?
- What do you think a chain of command is?
Why do we need organisational structures?
- Helps to bring order to the business
- Helps new employees
- Helps people outside of the business
- Can improve customer service
- Can aid expansion
Tall and flat organisational structures
Flat organisational structures lead to a wide span of control. Tall organisational structures have a narrow span of control.
Advantages of a flat structure:
Disadvantages of a flat structure:
- Communication is quicker
- Fewer people in the layers, so less mistakes
- People at bottom can feel involved with those at the top
- Can lead to delegation and empowerment
Disadvantages of a flat structure:
- Loose control over employees due to wide span of control
- Less promotion opportunities
Advantages of a tall structure:
- Lines of communication and responsibilities are clear
- Span of control is smaller
- Opportunity for promotion
Disadvantages of a tall structure:
- Slow decision making
- Poor communication
- Employees have little independence
centralisationa_and_decentralisation_worksheet.docx | |
File Size: | 18 kb |
File Type: | docx |
Centralisation and Decentralisation
Centralisation occurs when a small number of senior managers take all the important decisions.
Decentralisation allows employees working in all areas of the business to take decisions.
Decentralisation allows employees working in all areas of the business to take decisions.
Advantages of centralisation:
- Easier to implement common policies and practices for the business as a whole
- Economies of scale and overhead savings easier to achieve
- Quicker decision-making (usually) – easier to show strong leadership
Disadvantages of centralisation:
- More bureaucratic – often extra layers in the hierarchy
- Lack of authority down the hierarchy may reduce manager motivation
- Customer service does not benefit from flexibility and speed in local decision-making
Advantages of decentralisation:
- Reduce pressure on senior managers
- Motivate employees
- Better able to respond to local circumstances
- Quicker decision making
Disadvantages of decentralisation:
- Could lead to diseconomies of scale
- May produce extra costs (overheads and training)
- May make communication harder