What is an organisational chart?
A diagram that shows the hierarchy in an business, usually from top to bottom in terms of seniority.
What do organisational charts show?
- who is responsible for which functions
- who has authority for which subordinates
- lines of communication
- progression opportunities
What is span of control?
The quantity of employees (subordinates) for who a manger is responsible for
Whats a wide span of control?
When a manager is responsible for many subordinates
Whats a narrow span of control?
When a manger is responsible for fewer employees
What are the advantages and disadvantages of wide span of control?
Advantages:
- more autonomy for subordinates
- more chance to show responsibility
- manager has more people to delegate to
Disadvantages:
- manager ay loose control
- staff perform worse
- staff may not like being delegated work
What are the advantages and disadvantages of narrow span of control?
Advantages:
- clearer + more direct communication
- clearer on what to do
Easier for manager to control
Disadvantages:
- may feel constantly “watched over”
What does the effective span of control number depend upon?
- personality of manager
- skills of subordinates
- size of business
- industry business operates in
What is chain of command?
The order of authority and delegation in a business
What are the two types of chain of command?
- long chain of command
- short chain of command
What does authority refer to?
The power an employee has over a subordinate
What are the benefits of a tall structure?
- everyone knows who to report to
- lines of communication clearer
- more control - overall strategic direction
- guidance from above
What are the benefits of a flat structure?
- more empowering - more control + trust
- more teams work + flexible working environment (working form home)
- allows leaders to share ideas with subordinates
Subordinates more contact wit those above - better communication
- cheaper - less people so less salary costs
What is delayering?
A process of reducing the numbers of levels or layers in an organisational structure
What are the advantages do delayering?
- less wage costs in long term
- more employee responsibility due to inc delegation
- faster communication so decision made quicker
What are the disadvantages of delayering?
- spans of control will widen (investment of time + training possibly to get employees used to working more independently)
- redundancy payments (short term)
- damage o staff morale (colleagues leaving and anxiety ab further cuts)
What is delegation?
Te assignment to others of the authority for particular functions, tasks and decisions
What is empowerment?
Giving employees the power to do their job eg authority to make decisions
What does successful delegation and empowerment depend upon?
- type of employee (skills + attitude)
- type of task (level of difficulty)
- training
What is a centralised structure?
Where decision making is firmly at the top of the hierarchy - autocratic leader (usually) who makes decisions
What are the benefits of centralisation?
- ensures control maintained
- economies of scale and overhead savings easier to achieve (marketing eos)
- easier implementation of common policies and practices for whole business
- quicker decision making (usually) - easier to show strong leadership
What are the disadvantages of centralisation?
- more bureaucratic - often extra layers in the hierarchy so more expensive —> more staff
- lack of authority down hierarchy may reduce motivation of managers
- customer service: lost flexibility and have to find leader for decisions so may be slower
What is a decentralised structure?
Decision making is spread out/ delegated to include more junior managers in hierarchy. Region or an area may make the decision
What are the benefits of a decentralised structure?
- improved level of customer service bc decisions made on the spot
- good way of training developing junior management
- facilitates empowerment —> should improve staff motivation
