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Unit 2- Business Organizations

Unit 2- Business Organizations. Chapter 10 – Organizational Structure. You will learn…………. Why businesses need an internal structure How structure changes when businesses expand How organizational charts describe internal structures of an organization Ideas of Hierarchical Structure

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Unit 2- Business Organizations

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  1. Unit 2- Business Organizations Chapter 10 – Organizational Structure

  2. You will learn…………. • Why businesses need an internal structure • How structure changes when businesses expand • How organizational charts describe internal structures of an organization • Ideas of • Hierarchical Structure • Chain of Command • Span of Control • Line and Staff Managers • Delegation

  3. You will learn…………. • Business that are • Centralized • Decentralized • Different forms of decentralization

  4. What is an Organizational Structure? • It refers to the • Levels of management • Division of responsibilities …… within an organization • Shown on an Organizational Chart

  5. Organizational Chart

  6. Cosy Corner Convenience Store

  7. Job Description – Shop Assistant • Main Tasks • Working Conditions

  8. Delegation • Giving a subordinate the authority to perform tasks • NOT THE FINAL RESPONSIBILITY Authority to arrange the shelves in the store. Authority to order the stock.

  9. Delegation Delegation Authority to arrange the shelves in the store. A reduction in directcontrol by supervisors & managers once the tasks are done by workers. Increased trust in workers by supervisors & managers. Delegation must mean:

  10. Delegation Authority to arrange the shelves in the store. • Managers • look after more important jobs • make less mistakes • measure success of staff more easily Advantages

  11. Delegation Authority to arrange the shelves in the store. • Subordinate • work more interesting & rewarding • feel more important • training for progress • career opportunities Advantages

  12. Delegation Authority to arrange the shelves in the store. Risk of Failure Task completed better Complete Control

  13. Cosy Corner Convenience Store

  14. Cosy Corner Convenience StoresOrganizational Chart

  15. Organizational Chart Features • Hierarchy • Departments • Chain of Command

  16. Organizational Chart Advantages • Linkages • Communication channels • Position in organization • Taking orders • Accountability • Sense of belonging

  17. Chain of Command • Structure of the organization which allows instructions to be passed down from senior management to the lower levels

  18. Long Chain of Command

  19. Short Chain of Command

  20. Span of Control • The number of subordinates working directly under a manager

  21. Wide Span of Control

  22. Narrow Span of Control

  23. Chain of Command & Span of Control Longer Chain of Command Taller Organizational Structure Narrower Span of Control Shorter Chain of Command Shorter Organizational Structure Wider Span of Control

  24. Chain of Command & Span of Control Longer Chain of Command Taller Organizational Structure Narrower Span of Control Features Supervisor/Manager responsible for low amount of subordinates Less delegation More control over subordinates less watchfulness for the subordinates

  25. Chain of Command & Span of Control Longer Chain of Command Taller Organizational Structure Narrower Span of Control Features Communication Slower & less accurate message through many levels Workers less trusted Make less decisions Less job satisfaction Less room for mistakes

  26. Chain of Command & Span of Control Features Supervisor/Manager responsible for many subordinates More delegation Less direct control of subordinates Leads to job enrichment Shorter Chain of Command Shorter Organizational Structure Wider Span of Control

  27. Chain of Command & Span of Control Features Communication quicker & more accurate message through fewer levels Workers more trusted Make more decisions More job satisfaction More room for mistakes Shorter Chain of Command Shorter Organizational Structure Wider Span of Control

  28. STAFF MANAGERS • Specialists in their area • Offer advice & support • Report to Board of Directors (BOD) • Very qualified experts

  29. FUNCTIONAL DEPARTMENTS • One important responsibility • Specialist skills • Often efficient • Loyal to their department • (maybe not to the whole company) • MANAGERS in these departments are called LINE MANAGERS

  30. REGIONAL DIVISIONS • Look after stores in other countries • Specialist knowledge of the local market • Popular products in given country • Legalities

  31. FUNCTIONAL DEPARTMENTS • One important responsibility • Specialist skills • Often efficient • Loyal to their department • (maybe not to the whole company) • MANAGERS in these departments are called LINE MANAGERS • REGIONAL DIVISIONS • Look after stores in other countries • Specialist knowledge of the local market • Popular products in given country • Legalities • STAFF MANAGERS • Specialists in their area • Offer advice & support • Report to Board of Directors (BOD) • Very qualified experts

  32. Advantages of employing bothStaff Managers & Line Managers • Staff Managers provide advice to line managers on particular issues • Line managers have opportunity to concentrate on their main tasks • FUNCTIONAL DEPARTMENTS REGIONAL DIVISIONS LINE MANAGERS STAFF MANAGERS

  33. Disadvantages of employing bothStaff Managers & Line Managers • Conflict & frustration between the two groups • Different points of view on matters • Line employees confused about who to take orders / instructions from • FUNCTIONAL DEPARTMENTS LINE MANAGERS STAFF MANAGERS

  34. Management Systems • Decentralized • Many decisions delegated to lower levels of management • Centralized • Most decisions by the center • Higher levels of management

  35. Centralized Decisions • Important Issues • Investment Projects worth a large sum of money • Taking over of other businesses • Overall aims and objectives of the business • Firm’s Growth Strategy • Environmental Objectives

  36. Decentralized Management System Advantages • Decisions made by those that are “close to the action” • Delegation makes lower level management • Feel more trusted • More Job Satisfaction • Quicker Decision Making

  37. Functional Decentralization

  38. Federal Decentralization

  39. Regional Decentralization

  40. Project Teams Decentralization

  41. Are you able to………… • Draw & explain the significance of a simple organizational chart • Understand the changes that occurs to a business when the business expands • Know the difference between • Span of Control • Levels of Hierarchy • Line and Staff Managers • Understand the importance of delegation • Analyze the difference between a centralized and decentralized Organization

  42. Are you able to………… • Explain the different forms of decentralization

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