Organisational Structures
-How
the staff are organised, who reports to who
-A tall structure is many layers of workers, a flat structure has few layers
-Span of control refers to how many staff report to any one manager, described as wide or narrow
-Chain of command refers to chain of people involved when instructions are passed down the hierarchy. Described as long or short
-Centarlised refers to decisions being made centrally, either by HQ or senior management.
-Decentralised means passing down authority to lower level workers. (Remember a firm can pass down authority but not responsibility)
A firm may organise its staff by:
-Function (dept)
-Product
-Geographical
depending on the size, needs of the business. Some firm operate a matrix system
L3 Benefits of a tall structure
-Many layers generally implies a narrow span of control which indicates good control/supervision of staff.
-Many layers means good promotional prospects for career minded workers
L4 Problems with a tall structure
-Communication may be slow. Potentially messages may be distorted with a long chain of command
-It is costly to have layers of managers and supervisors.
L3 Benefits of a flat/short structure
-Staff may feel motivated by a flat structure as they feel like equals.
-Lest costly than having layers of managers and supervisors
-Communication should be good and fast due to few layers .
L4 Limitations of a of a flat/short structure
-If there is a wide span of control, managers may feel pressured and be overworked. Also workers may not get the supervision needed
-Staff may lack promotional prospects / career opportunities
L3 Benefits of decentralised structure
-Staff feel motivated as they are involved in decision making.
-Lower level managers may know local stores / customers better than HQ
-Decision making may be quicker if made at a local level rather than waiting for HQ
L4 Problems with a decentralised structure
-Staff may lack the ability to make key decisions
-Consistence of decision making, quality, pricing etc may be lost across the company
-Economies of scale may be lost ( eg if purchasing was decentralised)
-A tall structure is many layers of workers, a flat structure has few layers
-Span of control refers to how many staff report to any one manager, described as wide or narrow
-Chain of command refers to chain of people involved when instructions are passed down the hierarchy. Described as long or short
-Centarlised refers to decisions being made centrally, either by HQ or senior management.
-Decentralised means passing down authority to lower level workers. (Remember a firm can pass down authority but not responsibility)
A firm may organise its staff by:
-Function (dept)
-Product
-Geographical
depending on the size, needs of the business. Some firm operate a matrix system
L3 Benefits of a tall structure
-Many layers generally implies a narrow span of control which indicates good control/supervision of staff.
-Many layers means good promotional prospects for career minded workers
L4 Problems with a tall structure
-Communication may be slow. Potentially messages may be distorted with a long chain of command
-It is costly to have layers of managers and supervisors.
L3 Benefits of a flat/short structure
-Staff may feel motivated by a flat structure as they feel like equals.
-Lest costly than having layers of managers and supervisors
-Communication should be good and fast due to few layers .
L4 Limitations of a of a flat/short structure
-If there is a wide span of control, managers may feel pressured and be overworked. Also workers may not get the supervision needed
-Staff may lack promotional prospects / career opportunities
L3 Benefits of decentralised structure
-Staff feel motivated as they are involved in decision making.
-Lower level managers may know local stores / customers better than HQ
-Decision making may be quicker if made at a local level rather than waiting for HQ
L4 Problems with a decentralised structure
-Staff may lack the ability to make key decisions
-Consistence of decision making, quality, pricing etc may be lost across the company
-Economies of scale may be lost ( eg if purchasing was decentralised)