4.1a Organisation Structures
This section explains how a business is organised to manage its staff
Organisational Structures
How a business structures itself.
It allows each person to know their role:
- who is in charge of them
- who they delegate work to
- the number of staff they delegate to is their span of control
Managing Director
The director in overall charge of the business. Establishes the overall targets and long-term plans for the business
Directors
With the Managing Director / CEO, they establish overall targets and long-term plans for the business.
Will usually have a specific role within the organisation (e.g. Sales Director)
Managers
Establish short-term targets to achieve long-term plans set by directors. Use employees to achieve targets. There may be additional management layers. A manager will usually have a specific role within the organisation (e.g. Sales Manager).
Supervisors
Help managers achieve their targets by taking simple decisions and looking after small teams.
Operatives
Carry out basic duties and specific tasks set by the supervisors. They do not manage any other staff.
Tall vs Flat Heirarchy
Tall
Some businesses will have many layers of management, creating a long chain of command. Each manager has a narrow span of control.
Advantages
Managers have fewer staff to manage, so can do so more effectively
Disadvantages
Communication between the top and bottom of the chain can be difficult and inefficient
Flat
Some businesses will have few layers of management, creating a short chain of command. Each manager has a wide span of control.
Advantages
Communication between the top and bottom can be fast and efficient
Disadvantages
Managers may find it difficult to manage a large number of staff
Delayering
- Removing layers of hierarchy
- Usually to save costs, but can also improve communication and efficiency between layers
- Spans of control will be increased
- Tasks performed by removed layer will be delegated to those above and below