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Human Resources. Organisational Structure HL. Learning Objectives . Analyse delegation and accountability Understand the meaning of bureaucracy Understand the difference between centralised and decentralised structures and the factors that influence the degree of it.
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Human Resources Organisational Structure HL
Learning Objectives • Analyse delegation and accountability • Understand the meaning of bureaucracy • Understand the difference between centralised and decentralised structures and the factors that influence the degree of it
Delegation and Accountability Passing authority down the organisational hierarchy The obligation of an individual to account for his or her activities and to disclose results in a transparent way Flat organisational businesses will use delegation…. Important principles that can affect organisational structure and levels of motivation
Delegation • Delegation involves the passing of authority down the hierarchy • Authority occurs when an employee is given the right to do something by their superiors • This will: - Free up time for management - Motivate workers by providing them with greater responsibilities
Delayering • To reduce the size of a business hierarchy, especially in terms of a reduction in management and costs • This creates a flatter (less layered) organisational structure • But what does this involve? • It leads to: • Wider spans of control • Increased delegation to subordinates
Hierarchical / Bureaucratic structure This is called delayering
Bureaucracy • An organisational system with standardised procedures and rules
Centralised Organisations • What are they? • Organisations where important decisions are taken at the centre and then passed out to the various departments / locations • Advantages • Tight control of decisions • Decisions made by senior management • Helps decisions to be consistent across the business • Avoids repetition of functions (e.g. only one purchasing department) • Disadvantages • Lack of motivation for managers • Central management may be “out of touch” • May be slow to make decisions that need to taken quickly
De-Centralised Organisations • What are they? • Organisations where important decisions are delegated to managers in other departments / locations • Advantages • Increased motivation of managers • Encourages local initiatives • Decisions based on more up-to-date information • Decisions made quicker • Disadvantages • Managers may lack experience • Local decisions may be inconsistent with the overall business aims and objectives • Duplication of functions and costs
The Matrix Structure • A structure that creates project teams that cut across traditional functions / departments • Used to eliminate the many problems that arise with a hierarchical structure
Project Teams – Gathers together a team of specialists which form a team
The flexible future • The external environment is changing at a rapid pace, therefore businesses adapt and this is often done through retrenchment or downsizing
Henry Mintzberg • According to renowned management theorist Henry Mintzberg, an organization's structure emerges from the interplay of the organization's strategy, the environmental forces it experiences, and the organizational structure itself • When these fit together well, they combine to create organizations that can perform well • When they don't fit, then the organization is likely to experience severe problems
Henry Mintzberg • Different structures arise from the different characteristics of these organizations, and from the different forces that shape them (which Mintzberg calls the "basic pulls" on an organization). By understanding the organizational types that Mintzberg defines, you can think about whether your company's structure is well suited to its conditions. If it isn't, you can start to think about what you need to do to change things
Mintzberg's Organizational Types The main successful organizational structures that he identifies are as follows: • The entrepreneurial organization • Flat structure, relatively informal, lack of standardised procedures, flexibility • The machine organization (bureaucracy) • Standardisation, inflexible, tall structure • The professional organization • Specialisation by experts, decentralised • The divisional (diversified) organization • Different product lines, • The innovative organization ("adhocracy")
Based on the theory that an organisation is made up of seven elements Practical and identifiable Less tangible, and easy to identify, determined by the people at work in the organisation
This model helps to increase managers’ awareness of the less tangible but critically important factors required for an organisation to be successful
Informal Organisations • The culture of people and groups within a business • An informal organisation is a network of personal and social relations that develop between people within an organisation • Individuals’ effectiveness can greatly be affected by the people with whom they work • Good managers will try to use informal groups to the benefit of the business
Outsourcing HR Functions • Functions being outsourced may include: • Payroll management • Fringe benefits administration • Legal issues relating to employees • Recruitment • HR record keeping
HR Outsourcing Reasons and benefits Limitations Unexpected cost impact Organisationalresistance Reduced service levels Changes in the HRO vendor's business Other vendor management issues Organisational worries • Reduces costs • Allows HR to be more focused and strategic • More expertise and services • Less burden on leaner staff • Streamlines HR functions • Limits risks borne by HR • Offers flexibility for HR
