Management Structure and Organisation

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Management Structure and

Organisation


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Content

Management structure and design

Organisational design

Tall Flat

Matrix

Entrepreneurial

Management by objectives

Centralisation and decentralisation

Delegation and consultation


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Why Have a Structure?

A clear structure makes it easier to see which

part of the business does what

An organisational structure is the way in whicha business is arranged to carry out its activities


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Management Structure and Design

The choice of structure impacts the

organisations culture their ethos and beliefs

If businesses are looking to change theirdirection they often look at restructuring


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Organisational structure

Includes:

The routes through which communication pass through the

business

Who has authority and power and responsibility within thebusiness

The roles and titles of people within the business

The people whom individual employees are accountable for

and those for whom they are responsible


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Key terms

Hierarchy the number of layers of levels within

an organisation

Subordinate a worker Span of control the number of subordinates

who directly report into a manager

Ch

ain of command th

e line of communicationand authority from the top to the bottom of the

hierarchy


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Flat or Tall Structure?

A Flat structure has few layers in the hierarchy,

a wide bottom and a gentle slope to the top

Lots of small companies have a flat structure


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Flat Structures Advantages and

Disadvantages Traditionally an American structure

Span of control is wider

Less hierarchy easier to make decisions More employee empowerment

Can be cheaper as donthave to pay expensive

management salaries


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Tall structures

A tall structure has many layers in the hierarchy

As t here are many layers the chain of command

is longer Managers have smaller spans of control and

there is less delegation


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Tall structures Advantages and

Disadvantages Traditional structure of European companies

Clearhierarchy

Smaller span of management Longer chain of command

More control

Clear communication


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Tall to flat

In t he 1990s many people felt that traditional tall

structures were not cost effective so delayering

occurred Delayering is the process of removing layers ion

the hierarchy

Businesses saw delayering as a way of cutting

costs and increasing efficiency


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Matrix structure

Matrix t his is where the business is organised by task

Combines a vertical chain of command with project /product teams

The focus is on the task Is a more flexible structure and allows the business to

be more responsive to customer needs

However it can cause conflict and employees mayhave

divided responsibilities Extra costs may be generated by duplication of support

staff


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Entrepreneurial Structure

Often found where businesses operate incompetitive markets and especially where rapiddecisions are needed

Have a few core workers at the centre of theorganisation and peripheral workerssurrounding them

Depends onh

ow good th

e core workers are atmanaging and making decisions

Can be difficult for larger organisations


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Additional ways to structure 2

By function

By product / activity

By area By customer

By process


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Management By Objectives

Druckers theory of management:

Identified that managers should:

Identify and agree targets for achievement withemployees

Agree on the level of support needed to achieve the

targets

Evaluate how well the objectives were met


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Need to agree objectives for each worker

This can increase communication

Can increase motivation as subordinates knowwhat they need to achieve

Can help to identify training needs

If workers meet goals can allow them to achieveself actualisation needs (Maslow)


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It can also cause problems

Some workers may be threatened by the target

setting experience managers can set targetswhich can be perceived as unachievable

Needs commitment from everyone in the

organisation

Objectives may become outdated due to

changes in the business environment


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Centralisation and Decentralisation

Centralised organisations are where most

decisions are taken by senior managers at the

top of the hierarchy.

This leads to rapid decisions but low levels of

consultation

Decentralised businesses gives more authority

to workers lower down the hierarchy by

delegating decisions


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Delegation

Delegation is where managers give a portion of

their work to their subordinates

Delegation can allow subordinates to gain moreautonomy and become empowered leading to

an increase in performance

This is a technique used by democratic

managers


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Consultation

This is where managers ask for and take into

account subordinates views

Consultation allows a manager to keep morecontrol of the situation

This is a technique used by paternalistic

managers


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Summary

Organisational design describes how a business is organised

Tall or traditional structures have many levels in the hierarchy

Flat structures have few levels in the hierarchy

Matrix structures are organised by product / project

Entrepreneurial structures have core workers at the centre and peripheralworkers at the edges

Management by objectives is the idea that you set targets for all workers toincrease performance

Centralised organisations are where senior managers make key decisions

Decentralised organisations are where workers have more authority to makedecisions

Delegation is where managers give employees some of their work increasingtheir responsibility

Consultation where managers ask employees their opinions

Management Structure and Organisation

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