Improving Organisational Structures

1. Improving Organisational Structures AS Business Studies Unit 2

2. Aims and Objectives Aim: • Understand key elements of organisational structure Objectives: • Define organisational structure • Explain a hierarchical structure • Describe span of control • Illustrate organisational structures • Demonstrate managerial techniques.

3. Starter • Define the term ‘organisational structure’. Definition: • The ways the jobs, responsibilities and power within a business are organised.

4. Organisational Chart • Can be used to structure the business and include the following: • Where the responsibility and decision making authority lies in the business. • Job titles, roles and positions in business. • Lines of management and communication.

5. 3 Tiers of Hierarchy Structure

6. 4 Tiers of Hierarchy Structure

7. Levels of Hierarchy • Number of layers of employees in an organisation. • Employees have a clearly defined role • Approach is usually suited to departments. • The lines of authority in the structure are known as the chain of command. • If the hierarchy is too big the lines of communication can be stretched.

8. Span of Control • The number of subordinates, one job/post holder is responsible for. • Diagram 1: each member of senior team has a wide span of control because they are responsible for 6 subordinates. • Diagram 2: the span of control is narrower as each senior team member is responsible for 3 subordinates.

9. Draw the organisational structure. • Who has the largest span of control and how big is it? • How many layers are in this hierarchy? • Would you consider this to be a tall or flat structure? Why? Activity • Darren is the manager of a branch of Costa Coffee • Anna is the assistant manager and she reports to Darren • Anna delegates to the department managers - Jane, Tom and Omar • Scott, Andy and Toni all report to Jane • Rachel, Sally and Pete are accountable to Tom • Omar is responsible for Jon, Mark, Sam and James

10. Activity • You are going to work in teams to produce and sell business card boxes for Young’s Sports LTD. • You will have 10 minutes to produce as many boxes as possible. • For each box you will receive €2 plus a financial bonus for logos, slogans, colour. • You must appoint a manager of your team. Young Sports Ltd

11. Feedback • Were your managers good managers? • If so, why? • What made your team successful/unsuccessful? • Successful leaders should have considered the following things……….

12. Work Load • In diagram 1, the work load of managers is likely to be greater than the work load of managers in diagram 2 because they have a wider span of control. • Workers should not be overloaded as this may lead to a worker becoming demotivated, and unproductive.

13. Job Roles • It is vital that everyone in an organisation knows what the specific tasks and responsibilities of their job are. • Results in increased productivity and increased morale as workers feel confident in the tasks they are doing.

14. Delegation • Passing authority to make specific decisions to somebody down the hierarchy. • Dividing work load, can make business more efficient and productive. • Workers feel empowered to make decisions. • Workers morale may increase as they feel valued by the business.

15. Communication Flows • Chinese whispers game. • In small businesses, communication flows should be quick and accurate, usually face to face. Organisational structures are small and flat. • As businesses become larger, their lines of communication get larger, and can become inefficient (communication failures). • To avoid this technology must be used to ensure communication is as effective as it can be.

16. Internal Communication • Internal communication is communication within a business. • Brainstorm why it is vital that internal communication is good.

17. Why good internal communication is important • Everyone in firm is aware of objectives and what the firm is aiming for. • Customer needs can be met through communicating market research results. • Decision makers are aware of ideas and improvements for the business which could lead to competitiveness. • Decision makers are aware of changes in business environment such as a new competitor entering the market.