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2.2 Organisational Structure:The internal, formal framework of a business…
2.2 Organisational Structure:The internal, formal framework of a business that shows the way in which management is organised and linked together and how authority is passed through he organisation
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Flat Hierarchical
An organisational structure that has few levels of hierarchy and a wider span of control where managers will be responsible for many subordinates and many management functions will be delegated
Advantages
- Delegation becomes a relatively important part of managing an organisation - extra responsibilities for subordinates and, therefore, faster career development
- Communication may be improved (it should be faster) overall since there are fewer layers in the hierarchy
- It is cheaper to operate a wider span of control because there are fewer levels of management (management functions will be eliminated or delegated)
- Smaller 'psychological distance' between those at the top and those at the bottom of an organisation - perhaps reducing an 'us and them' culture where workers feel alienated from senior management
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Centralisation
Keeping all of the important decision-making powers within head office or the centre of the organisation
advantages
- A fixed set of rules and procedures in all areas of the firm should lead to rapid decision-making.
- The business has consistent policies throughout the organisation. This prevents any conflicts between the divisions and avoids confusion in the mind of consumers.
- Senior managers take decisions in the interest of the whole business - not just one division of it.
- Central buying should allow for greater (purchasing) economies of scale.
- Senior managers at central office will be experienced decision-makers.