Introduction to Business Organisation of Departments ORGANISATION CHARTS

Introduction to Business Organisation of Departments

ORGANISATION CHARTS An Organisation Chart is used to show the structure of an organisation. An example is shown here:

What Does An Organisation Chart Show? ØThe management structure and main departments within an organisation ØThe relationship between departments ØThe reporting structure ØThe span of control of each employee (the number of people a person has responsibility for) Who Would Use An Organisation Chart? ØVisitors to the organisation ØNew members of staff ØReceptionist

What information does an organisation chart show? v LEVELS OF RESPONSIBILITY v LINES OF COMMUNICATION v LINES OF RESPONSIBILITY (LINE RELATIONSHIPS) v LATERAL RELATIONSHIPS

LINES OF COMMUNICATION Board of Directors The chain of command shown is: Managing Director Board of Directors Managing Director Sales Manager

Organisational Structure

There are 2 main types of organisational structure TALL FLAT TALL ORGANISATIONS Many levels of management Managers have narrow span of control FLAT ORGANISATIONS Few levels of management Managers have wider span of control

Examples of Tall Organisations ü Police Force ü Army ü School Advantages Disadvantages C Easier for managers to supervise staff C More opportunity for promotion C Employees more likely to know their immediate boss D It may take longer to communicate decisions and information throughout the organisation D The management structure may be costly due to many highly paid jobs D Employees may not the opportunity to suggest ideas or show initiative

Examples of Flat Organisations ü Small Shops eg Newsagent, Chip Shop ü Small Offices ü Farms Advantages Disadvantages C Employees have more D Employees may become more stressed responsibility – should result in due to increased workload staff feeling valued/motivated D Increase in amount of training needed C Fewer levels of management – – due to employees wider more efficient communication responsibilities C Employees more likely to be D Fewer opportunities for promotion to involved in decision making management posts process

Changing the organisational structure Organisations are unlikely to remain the same year after year. The business may be growing in size or it may have to reduce its operations. METHODS OF RESTRUCTURING Growth – the organisation is becoming larger. More staff are employed by the organisation. New departments may need to be created. Downsizing – the organisation has to make cut backs without reducing output – some staff may be made redundant, others will find themselves with increased responsibilities. Delayering – the organisation removes certain levels of management. This results in managers having wider spans of control and the organisation having a flatter structure

What are the benefits and problems of restructuring? Possible Benefits C Reduction in costs – staffing costs, general running costs (Delayering & Downsizing) C To become more efficient C To improve communication within the organisation (Delayering) Possible problems D Low staff morale through redundancies, increased workload etc D Staff may not like the new structure and want things to stay the same D Costs of restructuring – associated with moving to new departments D Customers may be unfamiliar with the new structure