Flashcards in Chapter 12 (organisation) Deck (23):
what is Organisational structure?
Organisational structure is the internal, formal framework of a business that shows the way in which management is organised and linked together and how authority is passed through the organisation
what is The hierarchical (or bureaucratic) structure
This is one where there are different layers of the organisation with fewer and fewer people on each higher level. In general terms it is often presented as a pyramid.
The hierarchical (or bureaucratic) structure order?
1 Chief Executive
3 Middle Managers
5 Line Workers
The hierarchical (or bureaucratic) structure
1 The role of each individual will be clear and well defined
2 There is a clearly identifiable chain of command
3 This traditional hierarchy is most frequently used by organisations based on a ‘role culture’, where the importance of the role determines the position in the hierarchy
The hierarchical (or bureaucratic) structure Disadvantages?
1 Such a structure tends to suggest that one-way (top downwards) communication is the norm – this is rarely the most efficient form
2 There are few horizontal links between the departments or the separate divisions, and this can lead to lack of coordination between them
what is The matrix structure?
A matrix structure is an organisational structure that creates project teams that cut across traditional functional departments
The matrix structure Advantages?
1 It allows total communication between all members of the team, cutting across traditional boundaries between departments in a hierarchy where only senior managers are designed to link with and talk to each other.
2 There is less chance of people focusing on juts what is good for their department. This is replaced with a feeling of what is good for the project and the business as a whole.
3 The crossover of ideas between people with specialist knowledge in different areas tends to create more successful solutions
The matrix structure Disadvantages
1 There is less direct control from the ‘top’ as the team may be empowered to undertake and complete a project
2 This passing down of authority to more junior staff could be difficult for some managers to come to terms with
3 The benefit of faster reaction to new situations is, therefore, at the expense of reduced bureaucratic control, and this trend may be resisted by some senior managers
4 Team members may have, in effect, two leaders if the business retains levels of hierarchy for departments but allows cross-departmental teams to be created
what is Levels of hierarchy?
A level of hierarchy is a stage of the organisational structure at which the personnel on it have equal status and authority
A tall (or narrow) organisational structure has a large number of levels of hierarchy and this creates three main problems,
1 Communication through the organisation can become slow with messages becoming distorted or ‘filtered’ in some way
2 Spans of control are likely to be narrow
There is likely to be a greater sense of remoteness, among those on lower levels, from the decision-making power at the top
In contrast a flat organisational structure will have few levels of hierarchy, but will tend to have wider spans of control
what is Chain of command
The chain of command is the route through which authority is passed down an organisation – from the chief executive and the board of directors
The taller the organisational structure, the longer will be the chain of command – slowing down communications.
what is Span of control
The span of control is the number of subordinates reporting directly to a manager
Span of control, can either be wide – with a manager directly responsible for many subordinates – or narrow – a manager has direct responsibility for a few subordinates
what is Delegation
Delegation is passing authority down the organisational hierarchy
Advantages of delegation
1 Gives senior managers more time to focus on important, strategic roles
2 Shows trust in subordinates and this can motivate and challenge them
3 Develops and trains staff for more senior positions
4 Helps staff to achieve fulfilment through their work (self-actualisation)
Disadvantages of delegation
1 If the task is not well defined or if inadequate training is given, then delegation is unlikely to succeed
2 Delegation will be unsuccessful if insufficient authority (power) is given to the subordinate who is performing the tasks
3 Managers may only delegate the boring jobs that they do not want to do – this will not be motivating
What is Centralization
Centralization means keeping all the important decision-making powers within head office or the center of the organisation
What is Decentralization
Decentralization means decision-making powers are passed down the organisation to empower subordinates and regional/product managers
What is Delayering
Delayering means removal of one or more of the levels of hierarchy from an organisational structure
Advantages of delayering
1 Reduces business costs
Shortens the chain of command and should improve communication through the organisation
2 Increases spans of control and opportunities for delegation
3 May increase workforce motivation due to less remoteness from top management and greater chance of having more responsible work to perform
Disadvantages of delayering
1 Could be ‘one-off’ costs of making managers redundant, for example redundancy payments
2 Increased workloads for managers who remain – this could lead to overwork and stress
3 Fear that redundancies might be used to cut costs could reduce the sense of security of the whole workforce – one of Maslow’s needs
Advantages of centralisation
1 A fixed set of rules and procedures in all areas of the firm should lead to rapid decision making – there is little scope for discussion
2 The business has consistent policies throughout the organisation. This prevents any conflicts between the divisions and avoids confusion in the minds of consumers.
3 Senior managers take decisions in the interest of the whole business – not just one division of it
4 Senior managers at central office will be experienced decision makers
Advantages of decentralisation
1 More local decisions can be made that reflect different conditions – the managers who take the decisions will have local knowledge and are likely to have closer contact with consumers
2 More junior managers can develop and this prepares them for more challenging roles
3 Delegation and empowerment are made easier and these will have positive effects on motivation
4 Decision making in response to changes, for example in local market conditions, should be quicker and more flexible as head office will not have to be involved every time
what is a Line manager
Line managers are managers who have direct authority over people, decisions and resources within the hierarchy of an organisation