6.3a Organisational design Flashcards Preview

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Flashcards in 6.3a Organisational design Deck (25):
1

Organisational design definition

Process of shaping an organisation's structure

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What do organisational chart's show?

- The management hierarchy in a business
- Span of control
- Line management
- Chain of command

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Span of control definition

Number of subordinates for whom a manager is directly responsible

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Effects of a narrow span of control

- Allows for closer supervision of employees
- More layers may be required
- Helps more effective communication

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Chain of command definition

The lines of authority within a business

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Advantages of a short chain of command

- Better communication
- Easier to keep control over the staff

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Advantages of a long chain of command

- Clear lines of promotion
- Responsibilities can be delegated around

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What is a tall hierarchy also known as?

A traditional or mechanistic structure

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Advantages of tall hierarchy

More opportunities for promotion

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Disadvantages of tall hierarchy

- Takes longer for communication to pass through the layers
- More layers = more staff = higher costs

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Advantages of a flat structure

- Vertical communication is improved
- Fewer layers = less staff = lower costs

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Disadvantages of a flat structure

Fewer opportunities for promotion

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What does a matrix structure do?

Combines the traditional departments seen in hierarchical structure with project teams

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Advantages of matrix structure

- Improves communication
- Individuals get to use their skills
- Likely to result in greater motivation amongst team

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Disadvantages of matrix structure

- Members of project teams may have divided loyalties
- May not be a clear line of accountability for project teams
- Difficult to co-ordinate

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Delegation definition

The assignment to others of the authority for particular functions, tasks and decisions

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Advantages of delegation

- Reduces management stress and workload
- Subordinates are empowered and motivated
- Good method of on-the-job training

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Disadvantages of delegation

- Business should not delegate responsibility at all times
- Depends on quality of subordinates

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Business structure decision depends on

- Size of business
- Work involved
- Hard or soft HRM

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Centralisation definition

Small number of senior managers in a business take all the important decisions

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Decentralisation definition

Employees working in all areas of the business make decisions

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Advantages of centralisation

- Easier to co-ordinate and control
- Economies of scale
- Quicker decision making

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Disadvantages of centralisation

- More bureaucratic
- Lack of authority down hierarchy may reduce motivation
- Customer service lacks flexibility

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Advantages of decentralisation

- Better able to respond to local circumstances
- Improved level of customer service
- Increased staff motivation

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Disadvantages of decentralisation

- Decision is not strategic
- Harder to ensure consistent practices at each location
- Diseconomies of scale

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