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Organisational Structures

Unit 2.2: People In Business
by

Lani Douangchak

on 28 January 2013

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Transcript of Organisational Structures

Organisational charts are important to firms because they show: Levels of Hierarchy
Chain of Command
Span of Control
Centralisation & Decentralisation Why have a structure? * All businesses have to organise what they do

* A clear structure makes it easier to see which part of the business does what

* There are many ways to structure a business Finally Aims
To understand about the types of organisational structures used in business organisations and how these structures are formed to suit each business. Also, looking at how the roles and responsibilities are involved within these structures.


Objectives
1. To identify the key elements of an organisational structure and explain the differences in each type of organisation structure.
2. To explain the key terms of an organisational structure and its characteristics.
3. To explain the different roles and responsibilities within an organisational chart.
4. To identify the advantages and disadvantages of the different types of organisational structures and apply a real life business example. Key Elements of
Organisational Structure The organisational structure of a business represents the particular way that a business has been arranged in order to help it carry out its business activity.

The organisational structure shows a number of important aspects about a business. Types of Organisational Structures Hierarchical or Pyramid Structures
Tall or Flat The Growing Business Structures for both management and organisations differ greatly from firm to firm. However, we can divide firms into distinct categories which show underlying structures. Organisational Structures Unit 2.2: People In Business Aims & Objectives Objective Check You are able...

To explain the different roles and responsibilities within an organisational chart. Activity The organisational structure shows a number of important aspects about a business. What do you think these aspects are?... e.g. Roles of responsibility.

In pairs, list your ideas and we will discuss your answers with the class. You have 5 minutes to complete this activity http://www.online-stopwatch.com/countdown-clock/full-screen/ It shows the structure of authority within the business. Who is in charge of and responsible for whom. It shows the roles an titles of individuals within the business, that is, who is responsible for different areas. It shows the staff to who individual employees are accountable. It shows the routes by which communication passes through and
around the business. Matrix Structures Entrepreneurial Structures Activity Looking at the organisational structures images. Match the correct explanation of the structure to the correct image under the following organisational structures:

1. Tall and Flat Hierarchy Structure
2. Matrix Structure
3. Entrepreneurial Structure

Also, using the iPads, try to find a real life business example of the above organisational structures.

We will discuss your answers as a class. You have 5 minutes to complete this activity http://www.online-stopwatch.com/countdown-clock/full-screen/ Hierarchical or Pyramid Structures
Tall or Flat The most traditional form of a business because of its shape.
It separates employees into different layers depending on their seniority in the business.
Can consist of various different layers depending on the number of employees.
Is often formal and bureaucratic.
The business is often divided into departments with clearly defined job roles within departmental areas. Key Facts about Tall or Flat Hierarchical Structures The Matrix Structure Key Facts about the Matrix Structure More commonly adopted by businesses that have a project approach to work.
Departments still exist but individual employees from those departments also work within project teams.
An individual belongs not only to a specific department but also to a specific project.
Is a less formal structure and employee are placed within projects based on their ability, not formal status on the hierarchy.
It puts teams of people with a range of skills from different areas that are needed to get a certain task or project completed. The Entrepreneurial Structure Objective Check You are able...

To identify the key elements of an organisational structure and explain the differences in each type of organisation structure. Key facts about the Entrepreneurial Structure Often adopted by small businesses where speed of decision making and communication are vital to success.
This structure has little formality or hierarchy.
It relies on the central figure issuing power and instruction to a few employees.
Key support workers must possess good skills and be very flexible in their approach to make this structure successful.
This structure is dominated by one central figure (the owner). As businesses get larger, specialist groups appear
with assigned powers over even more groups. As the business grows and more people are involved the business will develop a more formal organisational structure.

This will show the roles, responsibilities and relationships of each member. Early stages of a new business there are often
only one or two people involved.
Therefore day-to-day tasks are carried out
by the owner.

No need for a formal structure as
communication will be carried out
informally (face to face). This is often illustrated through an organisational chart. How would you describe the term: Organisational Chart?.... It shows links between people and departments within the firm.
Also, shows communication channels, lines of authority and layers of hierarchy. Key Term We have now looked at the types of different organisational structures. However, it is important to understand what these structures show. Activity In pairs, looking at the worksheet I have provided with suggested words. Come up with your own explanation for the following key words:

Levels of Hierarchy
Chain of Command
Span of Control
Centralisation & Decentralisation
Delayering We will discuss your answers against the key terms to see if you have provided similar descriptions. You will have 5 minutes to complete this activity. http://www.online-stopwatch.com/countdown-clock/full-screen/ Level of Hierarchy The levels of hierarchy refer
to the number of layers
within an organisation. Chain of Command The line down which instructions
are passed through the
layers in the Hierarchy. Span of Control Is the number of subordinates
for whom a manager is
directly responsible. Centralisation & Decentralisation Decision making is retained
at senior management level.

Decision making is made at a lower level within the organisation. Objective Check You are able...

To explain the key terms of an organisational structure and its characteristics. What other ways do you think a business can structure themselves?... Can you give an example of the term
Chain of Command from this
organisational chart? The board of operators would report to the Program Director with information they have found. This can then be escalated to the Station Manager if necessary. What do you think the characteristics are of a wide and narrow span of control? Things to think about...
Speed of communication
Ease of sharing ideas and opinions
Cost of employees
Levels of control/skills/ability What are the advantages and disadvantages of Centralisation and Decentralisation organisational structures? This look more closely at the design of an organisation.
Where are decisions going to be made within a firm and what influences the choice?... Centralisation Advantages Strong leadership
Skilful decision
Clear achievements of firms goals. Centralisation Disadvantages Very bureaucratic and
authoritarian
Can be demoralising for non
senior managers Decentralisation Advantages Reduces the burden
Greater flexibility
Good for staff morale
Staff better motivated Decentralised Disadvantages Lack of uniformity in decision making
Possible loss of focus in direction of
the firm
Conflict can arise between
conflicting opinions of staff and
departments. Now we have established the types of organisational structures, the key terms and the roles and relationships. We will now look at the advantages and disadvantages of these different structures. Activity From what we have learn't so far in this lesson. We should now be able to have some ideas about the Advantages and Disadvantages of these types of structures.

1. Tall and Flat Hierarchy Structure
2. Matrix Structure
3. Entrepreneurial Structure

In pairs, produce a table for each of the organisational structure outlining the advantages and disadvantages.

Also provide an example of a real life business that would use this type of structure. You have 10 minutes to do this Activity http://www.online-stopwatch.com/countdown-clock/full-screen/ By function: arranging the business according to what each section or department does e.g. Finance, HR, IT, Sales & Marketing etc

By product: organising according to the different products made e.g. Apple – iPads, iPods, Macs, iPhone 3, 4 & 5.

By area: geographical or regional structure e.g. Geographical or regional structure e.g. USA, Europe, and Asia. Different ways a business may Structure You will be able...

1. To identify the key elements of an organisational structure and explain the differences in each type of organisation structure.

2. To explain the key terms of an organisational structure and its characteristics.

3. To explain the different roles and responsibilities within an organisational chart.

4. To identify the advantages and disadvantages of the different types of organisational structures and apply a real life business example. Homework Roles describe the different tasks that individuals are responsible for.

Its important to understand the terms of responsibility, authority and accountability. Roles and Relationships Responsibility Carrying out the burden of blame even if an error has been made by a member of staff. Authority Having the power to make a decision or carry out a task. Accountability The extent to which an individual is held responsible for his or her decisions and actions. Activity Using the iPad and the worksheet provided. List the job roles and responsibilities of a Director, Manager and Team Leader.

We will later share your answers with the class. You will have 10 minutes to complete this activity. http://www.online-stopwatch.com/countdown-clock/full-screen/ Advantages and Disadvantages of Organisational Structures Areas to also think about:

Span of control (narrow or wide)
Control
Work loads
Job allocation
Relationship
Delegation
Communication Flow Areas to think about:

Communication channels
Authority and responsibilities
Span of control - wide or narrow
Number of Job roles involved
Promotional opportunities
Speed of decision making
Sharing of information
Employee motivation/morale
Costs Objective Check You will be able...

To identify the advantages and disadvantages of the different types of organisational structures and apply a real life business example. I will provide you with some homework on what we have covered today about Organisational Structures.

I would like this completed by
next week: 23 February 2013 There is no 'ideal' organisational structure or span of control.
What works for one business may
fail for another, even if they are the same size. Overall... Delayering Involves removing one or more
layers of middle managers. Why might a company de-Layer? Cut the costs of paying many managers
Improve communication
Empower the remaining workers if they are given extra responsibilities
Modernising the business – moving from traditional structures Result in a loss of experienced, skilled managers
Redundancies in staff
Loss of customer service De-layering can... Activity In pairs, construct a table with three columns, one headed 'Span of Control' and the other two headed 'Advantage' and 'Disadvantage'. Think about the advantages and disadvantages to the business of having the following four examples of span of control, 5, 10, 20, 50. Lets watch this video clip about Management in Organisations. http://education-portal.com/academy/lesson/management-in-organizations-top-middle-low-level-managers.html
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