Human resource

• Organizational structure


  The internal, formal framework of a business
• What organizational structure shows

  • Who has responsibility of decision making
  • Formal relationship between people and departments
  • Number of subordinates under each manager
  • Formal channels of communication
• Flexible Organizational Structure


  • Workers readily adjust to their clients' needs, finish their work efficiently
• Hierarchical (or bureaucratic) structure


  • Includes different layers of the organization with fewer and fewer people on each higher level
  • Chief
  • Executive
  • Directors
  • Line Workers
• Advantages of hierarchical structure


  Role of each individual will be clear, clearly identifiable chain of command
• Disadvantages of hierarchical structure


  Managers are often accused of tunnel vision (they only see the perspective of their own dept), and few horizontal links between the departments leading to a lack of coordination
• Functional Structure


  • Divides a corporation into sections depending on specialization, such as marketing, HR, etc
• Advantages of functional structure


  Departmental loyalty and pride in the work of their department exists in employees, encourages employees to become specialists, and this can increase efficiency and productivity
• Disadvantages of functional structure


  Coordination between departments is difficult, there might be unhealthy competition between departments
• Flat Structure/Delayering


  • Delayering is the process of removing a management layer
• Business Unit Structure


  • Permits specialized managers to concentrate on the demands of various divisions
• Advantages of business unit structure


  It helps in decision making
• Disadvantages of business unit structure

  It might lead to rivalry between different departments
• Geographical Structure


  • Organizes people within an organization by geographic location, like countries or continents
• Advantages of geographical structure

  There is close communication with local customers
• Disadvantages of geographical structure

  Some economies of scale may be lost
• Product Structure


  • Corporation is divided into groups with people from different department to work on a product
• Advantages of product structure


  Helps your business focus on specific market segments and meet customer needs more effectively
• Disadvantages of product structure


  Duplicating functions and resources, e.g a different sales team for each division
• Matrix structure


  • An organizational structure that creates project teams, it is task/project oriented
• Advantages of matrix structure


  Allows total communication between all members of the team, crossover of ideas between people with specialist knowledge in different areas tends to create more successful solution
• Disadvantages of matrix structure


  There is less direct control from the 'top' as the teams may be empowered to undertake and complete a project, this passing down of authority to more junior staff could be difficult for some managers to come to terms with
• Chain of command


  The route through which authority is passed down an organization
• Span of control


  The number of subordinates reporting directly to a manager. Two types: wide - with a manager directly responsible for many subordinates, narrow - a manager has direct responsibility for a few subordinates
• Delegation


  The passing down of authority from higher to lower levels in the organization
• Advantages of delegation


  Gives senior managers more time to focus on important tasks, trains staff for more senior positions
• Disadvantages of delegation


  Managers may only delegate the boring jobs that they do not want to do - demotivating
• Centralization


  Keeping all of the important decision-making powers within the center of the organization
• Advantages of centralization


  Fixed set of rules and procedures in all areas of the firm should lead to rapid decision-making
• Decentralization


  Decision-making powers are passed down the organization to empower subordinates and Regional/product managers
• Advantages of decentralization


  More junior managers can develop and this prepares them for more challenging roles
• Factors that could determine the internal structure of a business


  • The style of management, or the culture of the managers
  • If the business were to grow, another manager or supervisor might be required
  • Retrenchment caused by economic recession or increased competition might lead to delayering to reduce overhead costs
  • Corporate objectives
  • Adopting new technologies
• The greater the number of levels of hierarchy


  The longer the chain of command
• Problems associated with a tall structure

  Is delayering the answer?
• Delegation


  Conflicts that can arise and potential benefits
• Important links between organizational principles


  • Accountability, authority and responsibility
  • Centralization and decentralization
  • Line and staff relationships
• Delayering


  Removal of one or more of the levels of hierarchy from an organizational structure
• Advantages of delayering


  Reduces business costs
• Disadvantages of delayering


  Fear that redundancies might be used to cut costs could reduce the sense of security of the whole workforce
• Line managers


  Managers who have direct authority over people, decisions and resources within the hierarchy of an organization