2.2 Organizational structure (Terminology (Levels of hierarchy (this term…
2.2 Organizational structure
Levels of hierarchy
this term refers to how many levels of responsibility are in a business. Each level indicates a level of seniority in the business
Chain of command
this is the formal route by which a decision must travel through the organization. Traditionally, decisions travel from the top of the organization downwards and are therefore often referred to as commands
Span of control
Span of control refers to how many subordinates are directly under the authority of a manager and whom managers are responsible for
this occurs when a manager gives authority for a particular decision but not the responsibility for the outcome
of that decision
a high degree of centralization indicates that all major decision making is maintained within a small group of managers operating close to the head of the business.
this is the opposite of centralization
this occurs when a business reduces the levels
of hierarchy by removing layers of management
indicates the relative importance of
rules and procedures(any administrative system)
Types of organizational chart
many levels of hierarchy
narrow spans of control
centralized decision making
long chains of command
few levels of hierarchy
wider spans of control
decentralized decision making
shorter ( though more diffuse) chains of command
Individuals at the top have more authority than those
Employees are grouped by department
Changes in organizational strutures
This structure is designed to be more
fexible and responsive to market demands
The model suggests that businesses can reduce costs, gain competitive advantage and increase response time by trimming their workorce to retain only a
All other supporting, non-central functions are outsourced wherever possible to the
The frst leaf of the shamrock represents the core managers, technicians and employees essential to the business.
The second leaf Handy calls the contractual fringe, because non-core activities are subcontracted out to specialist businesses.
The third leaf consists of a flexible workforce made up of part- time, temporary, and seasonal workers
telephone conversations ( recorded) .
Informal verbal communication
face- to- face conversations
telephone conversations (unrecorded) .
Informal written communication