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Organisational Structure

The document discusses various organizational structures, including hierarchical, flat, and matrix structures, highlighting their advantages and disadvantages. It explains how these structures impact decision-making, communication, and employee responsibility. Additionally, it addresses centralization versus decentralization and factors influencing the degree of centralization in organizations.

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Samm Dass
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22 views4 pages

Organisational Structure

The document discusses various organizational structures, including hierarchical, flat, and matrix structures, highlighting their advantages and disadvantages. It explains how these structures impact decision-making, communication, and employee responsibility. Additionally, it addresses centralization versus decentralization and factors influencing the degree of centralization in organizations.

Uploaded by

Samm Dass
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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HIERARCHICAL STRUCTURES

Organisational Structures
Organisation “a group of individuals working together for a specific purpose”
Business structure “the way in which a business is organised internally”

This is based on levels of authority and responsibility. People in the


organisation know their position.

Directors or Owners
Senior Managers
Middle Managers
Junior Managers
Operatives and support staff.

Advantages
1. Control of the organisation is kept in the hands of the person at the top.
2. It is easy to maintain a particular role.
3. Clearly defined chain of command.
4. Everyone in the organisation knows his or her role within the organisation.

Disadvantages
1. No limit to the number of levels of management between the top
management and support staff.
2. Decision-making can be slow or delayed as it can take a long time for
information to flow upwards, decisions made and then communicated
downward.
3. At each level instructions may be interpreted differently.
TYPE OF STRUCTURE

1
Hierarchical
A system in which grades of authority are ranked one above the other, i.e.
school departments.
 Tall diagram
 Specialised jobs
 Each group has a supervisor
 Formal structure
 Carefully arranged lines of communication
 Staff members have detailed job descriptions

A tall structure is sometimes called a “pyramid” structure, because it also


looks like a pyramid. At the top, there is only chief executive. At each level
below there are more and more employees.

FLAT STRUCTURES

This is based on the removal of management levels, giving a flatter structure.

Directors or Owners
Managers
Operatives and Support Staff

Advantages
 Less formality
 Fewer rules and procedures
 Staff know each other
 Communication is quicker and easier
 Decisions can be acted on quickly

1. The flow of information between upper and lower levels is much faster,
enabling quicker decision-making and faster response to problems.

2. With fewer levels of management to answer to, many managers and


operatives feel they have more responsibility for their own work, which
increases motivation and job satisfaction.

In recent years, more and more business organisations in both the public and
private sectors have developed flatter structures by cutting out layers of
middle management.
MATRIX STRUCTURES

This is often used for running specific projects, such as developing a new
product.

2
In a matrix structure, specialists are brought together from different
functions/departments within the organisation, to share their knowledge and
give advice about various aspects of a project. It is usually disbanded at the
end of the project. People with specialised knowledge and skills are put into
project teams. This means that team leaders can choose the right person for
a particular project, and allows employees in lower positions to participate.
Every individual is responsible for his or her own work, and the line manager
is the person responsible for the current project.

Not all organisations are structured in the same way. The structure depends
on the way in which its activities are arranged or grouped. It is only sensible
that people who do similar work should be grouped together.

All businesses are different and the way they are organised internally
depends on a number of factors:
 Size
 Number of employees
 Type of business – manufacturing or service
 Type of work
 Scope of activities – local, national or international

Centralised Structure – one in which a top manager makes all the decisions
and has total control over the way in which operational plans are carried out.

A centralised organisation in one in which most decisions are taken at the


centre or at the upper levels of the organisation. This leaves little discretion
and autonomy for the periphery or lower levels.

A decentralised organisation, on the other hand, is one in which there is


considerable delegation and autonomy is placed at the lower levels and
periphery of the organisation.

It is important to realise that centralisation is not necessarily related to the


geographical spread of the organisation. It is quiet possible for a multi plant
firm (such as a retail chain) to be highly centralised. Centralisation just
relates to the location of decision making within the organisation. We should
not think of this issue in absolute terms, but in a spectrum running from
highly centralised to highly decentralised; although the centre must retain
some control over the planning process.

Degree of centralisation affected by:

 Cost

More expensive actions are generally decide upon by the centre.

3
 Uniform policy

Where top management desires uniformity they will have to make the
decisions.

 History and culture

Organisations that have grown by internal expansion, especially if from a


strong founder, these organisations tend to be more centralised.
Organisations that have grown from mergers between existing companies
with varying cultures tend to be more decentralised.
 Quality of middle and junior management

A shortage of talented middle and junior managers will result in a centralised


structure.

Reference Business Studies – Hall pp 490 - 491

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