Transcript Introduction of Business Organisations

Introduction to Business
Organisations
Organisational Structure
What does organisational
structure show?
Names of the main departments
 Employee job titles
 Management structure
 Relationship of staff

Administration Manager
Administration Supervisor
WP Operator
Receptionist
Filing Assistant
KEY TERMS
Span of Control
 The number of employees each
person (manager) is directly
responsible for
Chain of Command
 The passing of information or
instructions from one level to
another
Relationships
LATERAL RELATIONSHIP
 Link between staff on the same level
 Staff who report to the same Line
Manager
LINE RELATIONSHIP
 Link between Line Manager and staff
immediately below them
Line
Relationship
Managing Director
Finance Manager
Sales Manager
Clerk
Sales Rep
Lateral Relationship
Purchasing Manager
Buyer
Buyer
Benefits of an organisation
chart to:
CUSTOMER/VISITORS
 show size of the organisation
 what activities are carried out
 who to contact within the organisation
EMPLOYEES
 show size and structure of the organisation
 reporting structure
 lines of communication/span of control
 relationships between staff
 promotion opportunities
Reporting
Structure
ACCOUNTABILITY – an employee
must be able to explain their action to
their manager
 AUTHORITY – the power that an
employee has to instruct others and
make decisions
 RESPONSIBILITY – to take charge
of a task, situation or person
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TYPE OF ORGANISATION
STRUCTURE
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TALL
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FLAT
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5 levels
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3 levels
STRUCTURE - FEATURES
TALL
 Many levels of management posts
 Narrow span of control
 Number of specialised jobs
FLAT
 Few levels of management posts
 Wide span of control
STRUCTURE - ADVANTAGES
TALL
FLAT
 Easier to supervise
 Staff are given more
staff
responsibility – more
motivating
 More promotion
opportunities
 Better communication
 Better worker/manager  More likely to be
relationship
involved in decisionmaking
 Staff will have a clear
idea of the scope of
 Team working may be
their duties
developed
STRUCTURE -DISADVANTAGES
FLAT
TALL
 Workloads likely to
 Employees may not feel
increase
involved in decisionmaking
 Less chance of
promotion
 complicated
communication channels  Wider span of
control
 Many levels of high paid
jobs
 Staff feel isolated
from management
 Lack of opportunity to
show initiatives
RESTRUCTURING
How organisations change
GROWTH
An increase in the amount or range
of goods sold
 Employment of additional staff
 Additional departments added or
expansion of existing departments
 Increase in size and number of
premises

DOWNSIZING
Number of staff reduced without
reducing output
 Staff are made redundant not
sacked
 Departments can be reduced
in size or removed
 Main reasons for downsizing is to
save money

DELAYERING
Removing a whole level of
management
 Should lead to management cost
savings
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OUTSOURCING
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Buying in services from another
organisation
Reduces the cost of employing
specialist staff
Allows staff to focus on core activities
Examples – security, office cleaning,
reprographic (brochures)
RESTRUCTURING
BENEFITS
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Improved
communication
Organisation
becomes more
efficient
Can reduce staff
costs
More delegation
opportunities
PROBLEMS
 Staff morale can be
low
 Resistance to change
 Costs
 Redundancies
 Confusion after
restructure
TEAM WORKING
WHY
 Solve problems
 Improve quality of product/service
 Wide range of skills and knowledge
 Improve inter-department
relationships
What makes a good team?
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Everyone is working towards the same goal
Everyone is committed to achieving the goal
Members help each other
Skills, experience and qualities of each
person is used
Everyone is responsible for success/failure
There is team planning and regular
discussion