Unit 4 - Human Resources

• Businesses have to organise themselves to be able carry out their activities efficiently and effectively.
• It is important that everyone in the organisation knows

  • What their duties are
  • The person or people that they have to report to
  • The other employees in the organisation for whom they are responsible
• An organisational structure sets this out so that everyone in the business knows this information. Without this internal structure, a business would be very chaotic and not very productive. All businesses have an internal organisational structure. The organisational structure shows the roles played by each employee in the business and who reports to whom within the business. The roles and working relationship in a business are shown in an organisational chart
• A CEO:

  • Is the highest ranking person in an organisation and has ultimate authority within the business
  • In a PLC, this person will be voted into position by the shareholders at the AGM
• Directors:

  • Establish the business's overall goals
  • Set long-term plans and targets for the business
• Managers:

  • Work to achieve the short and long term targets set by the directors
  • May be responsible for a function within the business, for example, marketing or finance
  • Use employees and other resources in the best possible ways
• Team Leaders:

  • Help managers to achieve their targets by reporting any problems and passing on instructions
  • Take simple decisions, such as allocating jobs among different employees
• Shop floor workers:

  • Carry out the business's basic duties or activities. These could be working on a production line, serving customers in a shop or basic office duties
• The number of people under the direct control (or authority) of others in an organisation is known as the span of control.
• A wide span of control means that workers are less closely supervised and monitored. This gives them the opportunity to work on their own initiative, which for some workers is motivational. On the other hand, they may not be as productive.
• A narrow span of control means that workers can be supervised and monitored much more closely, which means that they are likely to be more efficient but they may feel less trusted and unable to contribute their own ideas.
• In general, the longer the chain of command (the more levels of authority) the narrower the span of control.
• Workers who are under the authority of others are known as subordinates
• The number of different levels of authority in a business is known as the chain of command
• With a long chain of command, it is often difficult for the managers to communicate with the workers because messages are often misunderstood, become distorted or even lost altogether
• The chain of command in an organisation chart shows the lines of authority within the business upon which communication passes
• Communication - individuals would communicate with on another through

  • Messages
  • Emails
  • Letters
  • Word of mouth
  • Social media
  • Announcements
• Downward communication - communication flows from senior employees to more junior ones
• Upward communication - communication flows from junior employees to their line managers and other more senior employees
• Horizontal communication - communication takes place between employees at the same level within the organisation - for example a discussion between managers
• Tall structures helps communication as:

  • More managers to delegate out to
  • Less people in each layer to pass onto
• Tall structures hinders communication as there are

  • More levels of hierarchy to go through
  • Up and down communication may lose the message
  • Slower decision making as people may forget
• Flat structures helps communication as there are:

  • Less levels of hierarchy to go through
  • Message is harder to get lost/ misunderstood
  • Up-down communication is easier
• Flat structures may hinder communication as:

  • horizontal communication is harder - difficult as there are a lot of people
  • 1 person manages a lot of people meaning horizontal communication is a slow process
• Businesses that have a centralised structure keep decision-making firmly at the top of the hierarchy, amongst the most senior management
• Benefits of Centralisation:

  • Easier to implement common polices and practices for the business as a whole
  • Decisions are taken for the benefit of the whole business, not just one division or department
  • Consistency will exist amongst branches; therefore the customer experience will be uniform