PAGE 211
CHAPTER 12
UNIT:2
 Organisational
structure is the framework
for identifying & organizing the tasks to be
performed within an organisation.
 Structures can be illustrated by means of an
organisational chart.
 Who
has overall responsibility for decision
making.
 Individual workers can identify their position.
 Chain of command
 Span of control
 The identity of the supervisor to whom each
worker should report to is made clear.
 Formal channels of communication both
vertical & horizontal. This aid the
investigation of communication problems.
 The
hierarchical structure - The order of
levels of management of a business from the
lowest to the highest.
Decision-making starts at the top but may be
passed to lower levels.
 The role of each individual will be clear & welldefined.
 Vertical divisions could based on region or
country or any category. E.g.: Consumer goods &
industrial goods.
 If staff know where they are in the organisation
& what opportunities exist for promotion. This
can be motivating to some employees who are
ambitious as they can see the jobs they could do
in the future.

 Few
horizontal links & this can lead to lack
of coordination between them.
 It is very inflexible & often leads to change
resistance because all managers tend to be
defending their own position.
The matrix structure is an structure that puts
managers into project teams that cuts across
the departmental lines & creates project team
from all divisions. It enables workers from
different functions to work together without
constant need to refer up the hierarchy, so
faster decision making.
 This
structure cuts across the departmental lines &
creates project team from all divisions.
 This method of organizing a business is task or
project focused.
 This emphasizes getting people with particular
specialist skills together into project teams.
 Manager often argue that this is the BEST way of
organizing people because it is based on the
expertise & skills of employees & gives scope for
people lower down the organisation to use their
talents effectively.
It allows total communication between all
members.
 Less chance of people focusing on just what is
good for their department.
 Create more successful solution when ideas are
shared between each other.
 This system is designed to respond to changing
markets of technological conditions.
 It enables workers from different functions to
work together with constant need. They need to
refer up the hierarchy so faster decision making.

 Less
direct from the top as teams may be
empowered to complete a project.
 It could be difficult for some managers when
passing down of authority to more junior
staff.
 Conflict of interests - Two leaders if the
business retains levels of hierarchy for
departments but allow cross-departmental
teams to be created.
Levels Of Hierarchy is the order of levels of
management of a business from the lowest to the
highest.
 Each level represents a rank of staff.
 Lower ranks are subordinates to superiors of a
higher rank.
 The greater the number of levels, the greater the
number of different rank.
 Tall organisational structure has a large number of
levels of hierarchy.
This creates 3 main problems:
 a) Slow comm. or becoming distorted.
 b) Narrow span of control.
 c) Greater sense of remoteness, amongst those on lower
levels from the decision-making power at the top.
 Chain
of command is the route which
authority is passed down an
organisational./The way authority & power
are passed down in business.
 Span
of control is the number of
subordinates reporting directly to a manager.
Span of control can be either wide or narrow.
 Increase
the risk of wrong decision being
made as subordinates may be less well
trained or lack experience.
 It is very difficult for the manager to
supervise subordinates & ensure they are
working towards some common goal.
 Fewer promotional opportunities so can be
de-motivating.
 Delegation
is passing down of authority to
perform tasks & take decisions from higher
to lower levels in the organisation.
 It
is essential that the manager assign some
DUTIES to subordinates so they are able to
CONCENTRATE on these tasks. At the same
time, the assignment of tasks trains &
develops the skills of the next generation of
managers.
Advantages of delegation:
a) Releases managers to undertake a more
strategic role.
b) Show trust in subordinates & this motivates
staff.
c) Trains staff for more senior positions.
d) Quicker decisions & resultant cost savings.
e) Improved executive morale & efficiency.
Disadvantages of delegation:
a) Unsuccessful if the task is not made clear, if
training is not provided & if sufficient authority is
not transferred.
b) Managers may delegate boring jobs to worker.
This will not prove to be motivating.

 Centralisation
is keeping all of the important
decision-making powers with head office. There will
be minimum delegation to managers. Subordinates
would not have no authority to take decision. A
centralised organisation would insist on all sections
of the business following the same procedure &
gives the business a feeling of uniformity.
 Decentralisation
is passing decision making power
to managers in other areas, departments or
division. This must involve delegation. Subordinates
would have all the authority to take decision.
Decentralised organisations will allow staff to be
empowered.

a) The style of management / The culture of the
managers
· Managers adopted a Theory X approach then small spans of
control would be adopted in a hierarchical structure.
· A Theory Y manager would adopt very few levels of hierarchy
& prefer a matrix team-based structure.

b) Retrenchment caused by economic recession or
increased competition might lead to delayering to
reduce costs. This reduces levels of hierarchy &
shorten the chain of command.

c) Adopting new technologies can lead to a reduced
need for employee.
More levels --Longer chain of command
 communication efficiency
 spans of control are smaller in tall
organisation.
 delegation - Narrow SoC, managers able to
control a few people.
 motivation levels of junior staff
 business costs.
2.The organisational problems associated with
the tall structure have forced many firms to
reconsider the role and importance of middle
managers.
RESPONSIBILITY - In accepting the task. For
delegation to be effective, responsibilities
should be clearly defined.
 AUTHORITY - The subordinates must have the
authority to carry out these duties which include
spending money, using other organisational
resources, hiring & firing personnel.
 ACCOUNTABILITY - Manager are accountable for
the duties that have been assigned to them &
they are accountable for the actions of the
subordinates.

a) A fixed set of rules should lead to rapid decision
making.
b) The business has consistent policies which can
prevent only conflict between the divisions &
avoid confusion. (Consumer)
c) Senior managers take decision in the interest of
the whole business. Greater control.
d) Central buying should allow for greater
economies of scale.
e) Senior managers at central office will be
experienced decision makers.
f) Senior management will have more control of
business. E.g.: Budgets.
a) Allows more local decision to be made.
Managers may have closer contact with consumers.
b) Prepares junior managers for more challenging
roles.
c) Allows delegation & empowerment & these will
have positive effects on motivation.(To worker)
d) Decision making in response to changes.
e) It reduces the stress or burdens of senior
management.
f) It provides subordinates with greater job
satisfaction.
g) Delegation should allow greater flexibility & a
quicker response to changes.
 Line
managers: managers who have direct
authority over people decisions and
resources with in the hierarchy of an
organisation.
 Staff
managers: managers who as specialists
provide support ,information and assistance
to the line managers.
The network of personal and social relations
that develop between people with in an
organisation.
Group work –pg 222