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Introduction to Business Organisations
Organisation of Departments
ORGANISATION CHARTS
An Organisation Chart is used to show the
structure of an organisation. An example
is shown here:
Mr Summers
Head Teacher
Mr McKinnon
Depute Head Teacher
Mr Fruish
Depute Head Teacher
CAIRD
Mrs Graham
Depute Head Teacher
MORAY
Mr Robertson
Depute Head Teacher
GRANGE
Miss McIntosh
Depute Head Teacher
SETON
What Does An Organisation Chart Show?
The management structure and main departments within
an organisation
The relationship between departments
The reporting structure
The span of control of each employee (the number of
people a person has responsibility for)
Who Would Use An Organisation Chart?
Visitors to the organisation
New members of staff
Receptionist
What information does an organisation
chart show?
 LEVELS OF RESPONSIBILITY
 LINES OF COMMUNICATION
 LINES OF RESPONSIBILITY (LINE RELATIONSHIPS)
 LATERAL RELATIONSHIPS
LINES OF COMMUNICATION
Board of Directors
The chain of command shown is:
Managing Director
Board of Directors
Managing Director
Sales Director
Sales Director
Sales Manager
Sales Manager
Organisational Structure
There are 2 main types of organisational structure
 TALL
 FLAT
TALL ORGANISATIONS
 Many levels of management
 Managers have narrow span of control
FLAT ORGANISATIONS
 Few levels of management
 Managers have wider span of control
Examples of Tall Organisations
 Police Force
 Army
 School
Advantages
 Easier for managers to supervise
staff
 More opportunity for promotion
 Employees more likely to know
their immediate boss
Disadvantages
 It may take longer to communicate
decisions and information throughout
the organisation
 The management structure may be
costly due to many highly paid jobs
 Employees may not the opportunity to
suggest ideas or show initiative
Examples of Flat Organisations
 Small Shops eg Newsagent, Chip Shop
 Small Offices
 Farms
Advantages
 Employees have more
responsibility – should result in
staff feeling valued/motivated
 Fewer levels of management –
more efficient communication
 Employees more likely to be
involved in decision making
process
Disadvantages
 Employees may become more stressed
due to increased workload
 Increase in amount of training needed
– due to employees wider
responsibilities
 Fewer opportunities for promotion to
management posts
Changing the organisational structure
Organisations are unlikely to remain the same year after year. The
business may be growing in size or it may have to reduce its operations.
METHODS OF RESTRUCTURING
 Growth – the organisation is becoming larger. More staff are
employed by the organisation. New departments may need to
be created.
 Downsizing – the organisation has to make cut backs without
reducing output – some staff may be made redundant, others
will find themselves with increased responsibilities.
 Delayering – the organisation removes certain levels of
management. This results in managers having wider spans of
control and the organisation having a flatter structure
What are the benefits and problems of
restructuring?
Possible Benefits
 Reduction in costs – staffing
costs, general running costs
(Delayering & Downsizing)
 To become more efficient
 To improve communication
within the organisation
(Delayering)
Possible problems
 Low staff morale through
redundancies, increased workload
etc
 Staff may not like the new structure
and want things to stay the same
 Costs of restructuring – associated
with moving to new departments
 Customers may be unfamiliar with
the new structure