Business Management 2.2 – ORGANISATIONAL STRUCTURE
ORGANISATIONAL STRUCTURE – Internal, formal framework of a business that shows the way in
which management is organised and linked together and how authority is passed through the
organisation
TRADITIONAL HIERARCHICAL STRUCTURE – Shows
Who has overall responsibility for decision making
Relationships between people and departments
Chain of command
Span of control: number of subordinates reporting to each senior manager
Channels of communication
Identify supervisor to which each worker is answerable and should report
KEY PRINCIPLES OF ORGANISATIONAL STRUCTURE
Levels of hierarchy: stage of the organizational structure at which personnel on it have equal status
and authority
Tall structure: large number of levels and narrow spans of control
Slow communication / message distortion
Greater sense of remoteness
Greater chain of command
Flat structure: few levels and wide spans of control. Managers delegate more extensively as the
cannot control the work of a large number of employees
Better communication
DELEGATION AND ACCOUNTABILITY
Delegation: passing authority down the organizational hierarchy. Wider span of control = Greater
degree of delegation
Accountability: obligation of an individual to account for his or her activities and to disclose results
in a transparent way.
PRO Delegation CONS Delegation
Senior managers have more time for Delegation will fail if task is not well
important roles defined or inadequate training
Trust in subordinates. Motivation Unsuccessful if employee is given low
Trains staff for more senior positions power
Help staff achieve fulfilment (self- Not motivating if only boring tasks are
actualisation) delegated
Staff is accountable for their work
DELAYERING – Removal of 1 or + levels of hierarchy from an organizational structure. Wider spans of
control and increased delegation. IT helped to communicate and monitor performance
PRO CONS
Reduce costs One-off costs of making managers
Shortens chain of command and improve redundant
communication Increase workloads for remaining
Increase spans of control and opportunity managers
of delegation Less job security due to fear of
Increase motivation redundancies
1
ORGANISATIONAL STRUCTURE – Internal, formal framework of a business that shows the way in
which management is organised and linked together and how authority is passed through the
organisation
TRADITIONAL HIERARCHICAL STRUCTURE – Shows
Who has overall responsibility for decision making
Relationships between people and departments
Chain of command
Span of control: number of subordinates reporting to each senior manager
Channels of communication
Identify supervisor to which each worker is answerable and should report
KEY PRINCIPLES OF ORGANISATIONAL STRUCTURE
Levels of hierarchy: stage of the organizational structure at which personnel on it have equal status
and authority
Tall structure: large number of levels and narrow spans of control
Slow communication / message distortion
Greater sense of remoteness
Greater chain of command
Flat structure: few levels and wide spans of control. Managers delegate more extensively as the
cannot control the work of a large number of employees
Better communication
DELEGATION AND ACCOUNTABILITY
Delegation: passing authority down the organizational hierarchy. Wider span of control = Greater
degree of delegation
Accountability: obligation of an individual to account for his or her activities and to disclose results
in a transparent way.
PRO Delegation CONS Delegation
Senior managers have more time for Delegation will fail if task is not well
important roles defined or inadequate training
Trust in subordinates. Motivation Unsuccessful if employee is given low
Trains staff for more senior positions power
Help staff achieve fulfilment (self- Not motivating if only boring tasks are
actualisation) delegated
Staff is accountable for their work
DELAYERING – Removal of 1 or + levels of hierarchy from an organizational structure. Wider spans of
control and increased delegation. IT helped to communicate and monitor performance
PRO CONS
Reduce costs One-off costs of making managers
Shortens chain of command and improve redundant
communication Increase workloads for remaining
Increase spans of control and opportunity managers
of delegation Less job security due to fear of
Increase motivation redundancies
1
