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business 2.5 - Coggle Diagram
business 2.5
2.5.1 organisational structure
centralised structures
drawbacks
Because the people at the top of the hierarchy are less involved in the day-to-day work (operations) in a business, they can become disconnected from reality. this can lead to bad decisions
businesses often have lots of different functions, each needing different skills. the people at the top ate unlikely to have specialist knowledge of all the different functions
decision making can be slow because all decisions are made by a few people at the top of the business. the people at the top will end up with a lot of decisions that will take time
benefits
centralized organizational structures usually have consistent decisions and company policies across all the business' different function
the people at the top of the hierarchy usually have the most experience and expertise. they also have a complete view of the organisation and what's its overall goals are, so they may be best positioned to make the best decisions
Centralized organizational structures have a few people at the top of the hierarchy who make all the important decisions in a business.
decentralised organisational structures
drawbacks
decentralised organisations may have inconsistent decisions made across different business functions
some of these decisions may not be aligned with the overall aim or objectives of the business
benefits
decisions can be made faster because communication has to travel through less layers before being implemented
decisions are being made by people who have specialist knowledge and are closer to the day-to-day operations of the business
in decentralised organisations, decision making responsibilities are delegated by the top management to middle and lower level manages in the business
tall structures
a tall organisational structure is a heirarchy with a long chain of command (lots of layers) in the organisation
usually each manager has a small span of control (is responsible for a smaller number of employees), but lots of people are managers
flat structures
a flat organisational structure means the opposite. there are less layers in the organisational hierarchy
this means that managers have a large span of control ( manage or responsible for more employees)
2.5.2 organisational structures 2
the impact of organisational structure on managing
number of employees monitored
having a flat organisational stricture normally means that each manager is responsible for more employees. this can make it harder for a manager to monitor each employee really closely
communication
if communication has to go through lots of layers, then it will be slower. this can make it hard to make changes or pass on a message