organisational design

• levels of hierarchy 


  number of layers of authority within a business
• subordinate 


  a person under the authority of another
• span of control 


  number of subordinates directly responsible to a manager
• chain of command 


  line of communication and authority existing in a business
• tall structure 


  • lots of layers
  • long chain of command
  • narrow span of control
• tall pros


  • more opportunity for promotion = motivating
  • tighter control = narrow
  • easier to communicate horizontally
• tall cons


  • mistakes with comms vertically = many layers
  • slower decision making and more paperwork
  • employees feel micromanaged and demotivated if span of control is too narrow
• flat structures 


  • few layers of hierarchy
  • short chain command
  • wide span of control
• flat pros


  • more responsibility and freedom which can be motivating
  • quicker decision making and less paperwork
  • less opportunity for miscommunication = short chain of command
• flat cons


  • manager may feel overwhelmed as more employees answering to them
  • horizontal comms may be slow due to wide span of control
  • less chance for promotion may demotivate
• delayering


  removing one or more levels of hierarchy from structure
• why delayer?


  • gives junior employees more responsibility
  • improve efficiency and communication
  • Lower costs in long term
  • can cost more in short term as have to pay redundancy
• centralised structures 


  decisions made by senior management
• centralised pros


  • have lots of experience
  • overview of whole business so decisions are consistent
  • aren't biased towards certain departments
  • make big decisions quickly
• centralised cons


  • not may people are experts in all fields
  • excluding some members could be demotivating
  • slower reaction to change as has to go through many people
  • may not consumer trends as quickly as shop floor staff
• decentralised structures 


  authority is shared out to more junior employees
• decentralised pros


  • involvement in decision making motivates
  • can use expert knowledge from their own field
  • day to day decisions made quicker without consulting senior managers
• decentralised cons


  • juniors may not have experience to make decisions
  • inconsistencies may develops between areas
  • juniors may not be able to see the big over situation of business
• business may centralise to...

  save money in a competitive market

  • result in flat and wide structure
• business may decentralise if...

  they are expanding or operating from different locations

  • result in tall structure
• centralise or decentralise?


  depends on:

  • size
  • nature
  • culture
  • objectives
• matrix structures


  staff are organised by 2 different criteria- normally used in project based operations
• matrix pros


  • encourages departments to build relationships
  • follow clearly defied objectives
  • increased efficiency and motivation
• matrix cons


  • conflict between project and department managers
• authority 


  the right or power assigned to a particular role in order to achieve objectives
• delegation


  process of passing authority down from a manager to a subordinate