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2.2 Organisational structure (Key principles of organisational structure…
2.2 Organisational structure
Definition
Organisational structure
- the internal, formal framework of a business that shows the way in which management is organised & linked together & how authority is passed through the organisation
The organisational structure chart indicates:
who has overall responsibility for decision-making
the formal relationships between people & departments - workers can identify their position in the buiness & who is their immediate 'line' manager
how accountability & authority are passed down the organisation - the chain of command
the number of subordinates reporting to each more senior manager - the span of control
formal channels of communication both vertical & horizontal
the identity of supervisor or manager to whom each worker is answerable & should report
Key principles of organisational structure
Levels of hierarchy
Each
level
in the hierarchy represents a grade or rank of staff. The more levels, the greater is the number of different grades or ranks in the organisation.
A
tall organisational structure
has a large number of levels of hierarchy & creating 3 main problems:
Communication through the organisation can become sloww with messages becoming distorted or "filtered" in some way
Spans of control are likely to be narrow
There is likely to be a greater sense of remoteness, among these on lower levels, from the decision-making power at the top
In contrast, a
flat organisational structure
will have few levels of hierarchy but tend to have wider spans of control.
This will encourage managers to delegate more extensively as they cannot effectively control the work of a large number of employees.
It will also have a short chain of command and potentially, better communication between the top of the hierarchy & the lower levels.
Span of control
the number of subordinates reporting directly to a manager
The wider the average span of control, the fewer the levels of hierarchy, other things being equal.
Chain of command
this is the route through which authority is passed down an organisation - from the chief executive and the board of directors
Delegation & accountability
Definition
Delegation
- passing authority down the organisational hierarchy
Accountability
- the obligation of an individual to account for his or her activities & to disclose results in a transparent way
Advantages of delegation
Gives senior managers more time to focus on important, strategic roles
Shows trust in subordinates & this can motivate & challenge them
Develops & trains staff for more senior positions
Helps staff to achieve fulfilment through their work (self-actualisation)
Encourages staff to be accountable for their work-based activities
Disadvantages
if the task is not well defined or if inadequate training is given, then delegation will be unlikely to succeed
Delegation will be unsuccessful if insufficient authority (power) is given to the subordinate who is performing the tasks
Managers may only delegate the boring jobs that they do not want to do - this will not be motivating
Delayering
Definition
Removal of one or more of the levels of hierarchy from an organisational structure
Advantages
Reduces business costs
Shortens the chain of command & should improve communication through the organisation
Increases spans of control & opprotunities for delegation
May increase workforce motivation due to less remoteness from top management & greater chance of having more responsible work to perform
Disadvantages
Could be one-off costs of making managers redundant, e.g. redundancy payments
Increased workloads for managers who remain - this could lead to overwork & stress
Fear the sense of security of the whole workforce - one of Maslow's needs
Bureaucracy
A system that is most commonly found in government organisations.
It discourages initiative & enterprise as decisions are taken centrally & then put into efefct by staff following set procedures & protocols.
Definiton
- an organisational system with standardised procedures & rules
Definition
:
an organisational system with standardised procedures & rules