1.4.3 Organisational design

• • Organisational structure outlines the reporting relationships, roles, and responsibilities of employees in the organisation.
• Hierarchy

  • Refers to the levels of authority within an organisation
  • Describes the ranking of positions from top to bottom
  • Higher the position in the hierarchy, the more authority and power it holds
  • The hierarchy usually includes top-level management, middle-level management, and lower-level employees.
• Chain of command

  The formal line of authority that flows down from the top management to lower-level employees.

  • Defines who reports to whom and who is responsible for making decisions.
  • Helps establish clear communication channel & helps to maintain accountability within the organisation.
• Span of control

  • Refers to the number of employees that a manager or supervisor can effectively manage.
  • Based on the principle that a manager can only effectively manage a limited number of employees.
  • A narrower span of control means that there are more layers of management
  • A wider span of control means that there are fewer layers of management
• Centralised structure

  In a centralised structure, decision-making authority is concentrated at the top of the organisation, with senior management making most of the decisions.

  Promotes structure & consistency.
• Decentralised structure

  Decision-making authority is distributed throughout organisation, with lower-level employees having more decision-making power.

  • promotes flexibility and innovation
• Tall organisational structure

  • Multiple levels of management & more centralised decision making process.
  • Long chain of command.
  • common in large organisations.
• Advantages of tall structure

  • clear hierarchy of authority & defined roles & responsibilities.
  • Promotes specialisation & expertise within each department or function.
  • Offers opportunities for career advancement and promotion within organisation.
  • Increases efficiency and motivation
• Disadvantages of tall structure

  • create communication barriers between upper and lower levels of hierarchy.
  • Decision-making can be slow as information must pass through multiple layers of management
  • This can lead to bureaucracy and excessive levels of management
  • reduce efficiency and motivation
• What is a flat organisational structure?

  • characterised by fewer levels of management and a more decentralised decision-making process.
  • Short chain of command
  • Common in small organisations or start-ups
• Advantages of flat structure

  • Promotes culture of collaboration & open communication.
  • Decision-making - faster & more efficient.
  • Encourages creativity & innovation as employees have more autonomy & flexibility.
  • Increases efficiency and motivation
• Disadvantages of flat structure

  • Can lead to role ambiguity & lack of clear hierarchy.
  • May not provide clear opportunities for career advancement or promotion.
  • May require employees to take on multiple roles & responsibilities, leading to burnout and overwhelm.
  • Reduce efficiency and motivation
• What is a Matrix organisational structure?

  • Usually built around specific products or projects.
  • Combines the functional areas of business (HR, finance, marketing, sales) with specialist team that operates inside business.
• Advantages of Matrix structure

  • Promotes cross-functional collaboration and communication.
  • Allows specialisation & expertise within each functional area.
  • Enables efficient allocation of resources & coordination of multiple projects.
  • Increases efficiency and motivation.
• Disadvantages of Matrix structure

  •  Can lead to conflicts over priorities and resources.
  • Can create confusion over roles & responsibilities, particularly when multiple managers are involved.
  • Requires high degree of communication & coordination - can be challenging.
  • Reduce efficiency and motivation