Business Revision Guide: 3.2

• Organisational structure

  How people and departments are arranged within a business
• Organisational chart

  A diagram that shows how the workers are organized in a business and who is in charge of whom
• Authority

  The power that one person has to make decisions and to give instructions to those workers they are in charge of. A line manager is the person in charge of other workers.
• Delegation

  Process where the manager gives a subordinate responsibility to make certain decisions, but the manager remains ultimately responsible
• Subordinates

  Workers that a line manager is responsible for
• Span of control

  The number of employees that are managed by a manger.
• Chain of command

  The path of authority along which instructions are passed, from the CEO downwards
• Tall Organisational Structure

  • Many layers of staff from top to bottom
• Flat Organisational Structure

  • Only a few layers, maybe as little as 2 or 3
• Advantages of Tall Structure

  • Clear lines of communication
  • Narrow span of control
  • More opportunities for promotion within the organisation
• Disadvantages of Tall Structure

  • Subordinates feel too controlled-can stifle motivation
  • Workers only talk to immediate colleagues and may be less sympathetic or supportive
• Organisations that suit Tall Structure

  • Large organisations such as hospitals
  • Non-creative businesses where workers perform limited, clear tasks, for example, a building company
• Advantages of Flat Structure

  • Managers delegate responsibilities - good for motivation
  • Structure is good for generating ideas
• Disadvantages of Flat Structure

  • Not always clear lines of communication
  • Wide span of control
  • Few promotion opportunities reduce motivation
• Organisations that suit Flat Structure

  • Creative businesses, such as computer game design
  • Smaller businesses because they can help workers feel valued
• Ways businesses can be organised

  • Organised by function (functional areas)
  • Organised by product (different products)
  • Organised by place (by locations)
• Reasons for choosing different organisational charts

  • Effective communication - whichever way results in the best communication for their organisation
  • Different job roles and responsibilities - may be more beneficial to have those in the same functions together
  • Different ways of working - whether the business needs creative working or have clear tasks
• Full-time working

  When a person works 35 hours or more per week. Worker permanently available for the business. Worker may be paid at a time no work is being done. Tied to working a full working week throughout the year.
• Part-time working

  When a person works less than 35 hours per week. Worker can be asked at specific times the business needs. May have to train more workers than if it only had full-time workers. Can work when it suits them eg during school hours. Only get paid for the hours they work meaning they don't earn enough.
• Flexible working

  People working partly at their place of work and partly elsewhere eg home. May result in motivated workers who like the flexibility of when they will work. The worker may not be available to work when needed by the business. Can work at times that suits then eg. work four long days and take the fifth day off as flexi-time. May not be offered as much work as they want.
• Temporary working

  Person only works for a short period of time eg. short-term contract. Only need to employ the person when they need them eg. at Christmas time. May find it difficult to recruit enough workers at times when they are needed. Can work and earn for a period and then have time to do other things they want to e.g. holidays. May find there are times of the year when there is no work for them.
• Working from home

  Person completes in their home. The business may save costs by not having to provide office space. Communication may not be good, reducing their efficiency. Saves time and money by not having to travel to work. May find there are distractions at home eg children.
• Working while mobile

  When people work while they are on the move, travelling or on holiday. The business benefits from the increased productivity of the worker. May not be able to monitor they are working as much as he or she should. Can toke full use of their Time, even when they are travelling. May feel under pressure to work a lot, even while on holiday.
• Self-employment

  When people work in their own business selling their work to buyers who may be consumers or other businesses. Can use for specific jobs and not pay national insurance or pension contributions for the worker. Self-employed person may not work in the way the business wants or trains their own staff. May like being in control and may be highly motivated. Less job security for the worker as there may be times when there is no work and so no income.