CHARACTERISTICS OF ORGANISATIONAL STRUCTURES BY PAMALA MILLAR TALL

CHARACTERISTICS OF ORGANISATIONAL STRUCTURES BY PAMALA MILLAR

TALL ORGANISATIONAL STRUCTURES A tall organisation has many levels of management and supervision. There is a long chain of command running from the top of the organisation Chief Executive down to the bottom of the organisation shop floor workers. Advantages ü There is a narrow span of control i. e. each manager has a small number of employees under their control. This means that employees can be closely supervised ü There is a clear management structure. ü The function of each layer will be clear and distinct. There will be clear lines of responsibility and control ü Clear progression and promotion ladder Disadvantages ü The freedom and responsibility of employees (subordinates) is restricted. ü Decision making could be slowed down as approval may be needed by each of the layers of authority ü Communication has to take place through many layers of management ü High management costs because managers are generally paid more than subordinate; A management layer will tend to get more pay than managers/employees in the layer below them

HIERARCHICAL STRUCTURE A hierarchical organisation employees are ranked at various levels within the organisation, each level is one above the other. At each stage in the chain, one person has a number of workers directly under them, within their span of control. A tall hierarchical organisation has many levels. Advantages ü Authority and responsibility clearly defined. ü Promotion path is clearly defined ü Encourages effective use of specialist managers ü Employees can be very loyal to their department Disadvantages ü Organisations can be bureaucratic and respond slowly to change in customer needs and the market ü Poor communication especially in the horizontal communication, this is communication beterrn different departments at the dame level ü There could be the problem that a department may make a decision that benefits them and not the whole organisation

FLAT ORGANISATIONAL STRUCTURE Many organisations have their employees in layers. Employees with the most power will be in the top layers and those with the least will be in the bottom layers. Organisations will structure the layers in a number of different ways. Flat organisations are often small and will have relatively few layers or just one layer of management. From top to bottom is short and the span of control is wide. Span of control refers to the number of employees that each manager is responsible for. If a manager has lots of employees reporting to them, their span of control is said to be wide. A manager with a small number of direct reports has a narrow span of control. Due to the small number of management layers. Advantages ü There is better communication between manager and staff ü Fewer layers of management will make team spirit better and increase interaction between everyone ü Easier decision making means less bureaucracy ü Less managers means less cost as the cost a lot more than non management staff Disadvantages ü Staff may have more than one manager as there is more than one manager at the same level in an organisation. ü Managers have wide spans of control which may mean that will hinder the growth of the business. ü Small organisation's like partnerships, co-operatives, private limited companies structure will be limited.

CENTRALISED STRUCTURES Centralised structures is where it keeps all the decision making firmly at the top of the chain, where the most senior managements. Advantages ü Easier to implement common policies and practices for the whole business ü This prevents other parts of the business becoming too independent ü It is easier to co-ordinate and control with budgets etc ü Quicker decision making – This shows strong leaderships Disadvantages ü There is often extra layers in the hierarchy ü Local or junior managers are likely to be a lot more closer to all the customers needs ü Lack of authority down the hierarchy may reduce the motivation of the managers ü Flexibility and speed of local decision making

DECENTRALISATION STRUCTURE Decision making in the decentralisation is spread out to include more managers in the hierarchy, also the individual business units or the trading locations Advantages ü Senior managers can concentrate on important decisions whilst delegating less important decisions to people down the organisational structure ü People lower down the chain have a greater understanding of the environment they work in and the people customers and colleagues that they interact with. Kowledge, skills and experience may enable employees to make more effective decisions than senior managers ü Empowerment will enable departments and employees to respond faster to change. Empowerment provided by decentralised organisations may grants employees the opportunity to make a success of their responsibilities. It may take longer for senior managers not directly involved with departments to respond to market changes. Disadvantages ü This is not necessarily strategic ü Harder to make sure that each location has the consistent practices and policies ü There may be a duplicate of roles ü Make it harder to control financially, risks of cost-overs

ENTREPRENEURIAL STRUCTURE Entrepreneurial business structure is commonly found in sole traders or organisations that need to make quick decision making with out having to discuss or justify it with anyone. Any decision that needs to be made is either centralised by one person or at head office, all decisions are then communicated to all the workers, as the workers have little or no say in the decision making. Advantages ü Ability to make decision quickly ü It is one of the less expensive business structure ü At least then everyone knows exactly who is in charge and who makes all the decisions and who delegates them once decisions have been made. Disadvantages ü This could cause staff to lose morale and motivation due to being told what to do and having no say ü Sometimes its not always the best idea to make the quick decisions as the person making them might not know as much about the problem, its always better to have an expert on the pacific area. ü The decision makers have a lot of decisions to make, if there is so much to be made then it would be a good idea to appoint a manager and delegate responsibilities for them to make the decisions