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Business Organisation Structures (Flat Structure flat structure…
Business Organisation Structures
Flat Structure
Features
Wide span of control
Very few layers
Short chain of command
Best for small businesses w/less job roles
Advantages
Info passed accurately and quickly
Quicker decision making as employees have authority
Good communication flow
Employees empowered due to wide span of control
Staff costs kept down
Disadvantages
Reduced promotion oppurtunity
More ambitious employees may leave
Employees at bottom may not be supervised - wide span of control - leads to mistakes
Hierarchical/tall structure
Features
Clearly defined chain of command
Each level has a person in charge of several people
many layers of management
Clear division of functions
Directors and managers appointed to most functions
Narrow span of control
Advantages
Authority is delegated from above so employees feel empowered to make decisions in their areas of work
Narrow span of control - supervision closer
Everyone knows their job roles and whom they are accountable
Fewer mistakes
More opportunistic for promotion
Middle managers can increase efficiency
Disadvantages
responsibility can't be delegated - higher ups are responsible for lower down employees
Poor communication - info can be distorted
Long chain of command - long decision making process
Different departments will have different views
Centralised Structure
Features
Info flows from top to bottom
Owner is responsible for companies business operations
Decisions for whole business are made at top of hierarchy
Advantages
Useful in times of uncertainty - strong leadership = quick responses to problems
Decisions benefit the whole company
Less likely to make mistakes as people at the top tend to be specialist
Quick responses to problems - only a few people at the top have to be consulted
Disadvantages
Better understanding of customers lower down - isn't taken into account when decision making
Decisions made for people lower down - may feel unmotivated
Decentralised structre
Features
Relies on delegation of authority
Encourages employees to take more responsbility
People at the bottom can make decisions about their day-to-day activities
High level of co-ordination between employees
Advantages
Employees empowered/motivated
Top people can focus on the most important decisions
Quicker responses to customers as lower downs have higher understanding of customer needs
Decisions can be depending on the branch area
Disadvantages
Quality of decisions has risk of being poor
Conflict surrounding decisions could arise
Decisions may not reflect whole business - stakeholders confused
Matrix Structure
Features
Used to run projects, focus on one area/product
Team members report to departmental manager as well as project manager
Teams from different departments
Advantages
Collaboration between departments - inc productivity and efficiency
Combined skills - collective expertise - quicker decisions
Flexible - teams can be removed without disrupting the system
Greater motivation as everyone can contribute own views
Cross-functional team can be made at each location to meet customer needs
Disadvantages
Conflicting instructions from project/departmental managers
Two managers = costly = reduces profitability
Miscommunication - line managers can be confusing
Unhealthy competition due to sharing of employees
Managers have different leadership styles
The status of different levels of job role
In a medium-large business
Types of job role
Chief Executive
Responsible for success/failure of the business
Person with the most authority
Makes important decisions that affect the whole business
Directors
Oversee activities undertaken within their function
May be several directors, report to the chief executive
Managers
Make sure their department aims/objectives are met
Decisions concerning the whole department are made by managers
Supervisors
In charge of team members in a specific area of a department
Make day-to-day decisions
Assistants/operatives
At the bottom of the hierarchy
