Organization Structures & Employees

• Organisational Charts -

  The internal structure of a business is known as its formal organization

  The formal organization can be represented by an organizational chart.
• Directors

  • they make all the important decisions in a business
  • 4 categories : Finance, Marketing, Production + HR
  • Accountable to the Chairperson, authority over managers
  • Appointed by the owners to run the business
  • Together with the chairperson + other directors they form a board of directors
• Managers

  • Main role : Achieve the objectives of the owners
  • They are responsible for planning, controlling, organizing, motivating, problem-solving + decision-making.
  • the manager in each department is accountable to the departmental director and the have authority over supervisors
• Supervisors

  • They have authority over operatives + general staff
  • Supervisors may carry out managerial duties but at a lower level
  • Monitor work in a particular area
• Operatives

  • they are accountable to supervisors/ managers
  • They have more status than general staff because they are skilled
  • They are involved in the production process
• General Staff

  • They are often not skilled workers
  • With training they can perform a variety of tasks + gain promotion
• Professional Staff

  • Skilled + highly- trained.
  • E.g. lawyers, doctors, pilots etc.
• Chain of command: route through which orders are passed down the hierarchy
• If the chain of command is too long:

  • messages may get lost / confused
• Span of Control : No. of people a person is directly responsible for in a business
• If a business has a wide span of control it means that a person controls relatively more subordinates

  If a business has a narrow span of control a person controls fewer subordinates, there are usually more managerial positions
• Flat Structure:

  • Communication is better because chain of command is short
  • management costs are lower, because there are fewer layers of management
  • Control may be friendly and less formal because there is more direct contact between layers
• Tall Structure

  • communication is poor, because there’s a long chain of command
  • management costs are higher
  • there can be a clear route for promotion. That is a source of motivation.
  • Control tends to be more formal and less friendly
• Delegation : Authority to pass down, work from superior to subordinate

  in some situations, a manager may hand a more complex task to a subordinate - time can be saved if a subordinate completes the task
• Centralized : type of organization system, where most decisions are made at the top of the organization, and then pass down the chain of command
• Decentralized : type of organization system where decision making is pushed down the chain of command, and away from the top
• Centralized – advantages

  • Senior management has complete control over resources
  • senior management are trained and experienced in decision making
  • it prevents parts of the business acting independently
  • coordination and control is easier
• Centralized – disadvantages

  • employees may feel the motivated without any authority
  • less creativity in fewer ideas
  • People at the top may be out of touch with the needs of customers served by local employees
• Decentralized – advantages

  • workers have autonomy and may be better motivated
  • it speeds up decision making
  • it takes pressure off, senior management by reducing their workload
  • more opportunity to be creative and share their workload
• Decentralized – disadvantages

  • senior managers may lose control of resources
  • some employees may not be able to make decisions
  • some employees may not like the extra responsibility without extra pay