Thought for the day:
‘Watchout for the fellow who
talks about putting things in
order! Putting things in order
always means getting other
people under your control.’
Denis Diderot (1713 – 1784)
Get an A
A
Grade
Level 4
Evaluation
To what extent, Evaluate, discuss,
justify, advise, recommend.
Apply, Examine, Analyse,
Interpret, Formulate.
Level 3
Level 2
Level 1
Application & Analysis
Understand
Knowledge
Compare, Contrast,
distinguish, prepare,
construct, calculate,
explain, comment
Define, Identify,
Complete, Outline,
describe, Classify
2.2 Pre-read Chapter
Target

Learning Objective
To construct different types of organization chart and describe the nature
of their structure, for example, flat, tall.
Explain how organizational structures affect employee motivation,
communication and performance (HL).
Who?
ALL
Level 1
Identify why firms need to organize employees in particular ways, for
example, by function and geography.

Analyse changes in organizational structures and their effects.
Discuss factors influencing the degree of centralization and
decentralization (HL).
MOST
Level 2
Discuss the development of more flexible organizational structures. Apply
the theories of writers such as Mintzberg and Peters (HL).
Analyse methods of organizing human resources that are used by
organizations.
Analyse the reasons and evaluate the benefits from outsourcing,
offshoring human resource to external organisations located nationally or
globally.

Evaluate the role and importance of the informal organization (HL).
Evaluate whether firms will befit from outsourcing, off shoring and the
migration of human resource functions.
Keywords
SOME
Level 3
&4
Accountability
De/Centralisation
Chain of
command
Delayering
Delegation
Offshoring
Outsourcing
Organisational
chart
Responsibility
Span of control
What is the difference between
Accountability
&
Responsibility?
Organisation Charts
All business have an internal structure – the way
human resources are organised. This is known as the
formal organisation of the business. It takes into
account:
•The relationship between individuals
•Who is in charge
•Who has the authority to make decisions
•Who carries out decisions
•How information is communicated
School
Organisation
Chart
Organisation Charts
• Organisational charts are used to illustrate
the structure of the business.
Structure and Hierarchy
• .. Are shown by an
organisational chart
• Traditional business have a
series of levels, where each level
has a responsibility and
authority over level below them.
This is called a hierarchy.
• An organisational chart sets out
who has authority to make
decisions and the responsibility
for making them.
Structure and Hierarchy
• It shows who individuals are accountable to –
who is directly above them in the hierarchy.
• The chart also shows how the organisation is
divided up. It can be divided by function
(department), product or geographical area.
Organisation
Charts
Why have a chart?
Why do business draw such charts:
• To spot communication problems.
• Help individuals see their position in a
business
• Pinpoint areas where specialists are needed
• Show how different sections of the firm relate
together
Structures can be ‘tall’ or ‘flat’
• Organisations that has lots of levels in their
hierarchy are called ‘tall’. They have a large
number of people between the ‘top’ and the
‘bottom’.
• Tall structures have a long ‘chain of command’
Levels of Hierarchy
• Ranking system
• What are the advantages and disadvantages
of hierarchy structure?
Pg 109
Chain of command
The HIERARCHY in a business is the order or
levels of management in a business from the lowest
to the highest rank.
It shows the CHAIN OF COMMAND within the
organisation – the way the authority is organised.
Orders passed down the levels the information
passed up.
The chain of command is the communication and
authority up and down the hierarchy.
Structures can be ‘tall’ or ‘flat’
• If the structure is too tall, it affect
communication.
• Messages take a long time to get from one
end of the chain of command to the other,
and they can get distorted along the way.
• Decision take a long time to make.
• And.. There is a lot of paper work.
Structures can be ‘tall’ or ‘flat’
• ‘Flat’ organisations only have a few levels in
the hierarchy.
• If the structure is too flat, then managers can
get overwhelmed by too many people
reporting to them.
Delayering
• - is when a business removes a layer of the hierarchy
from its organisational structure – usually managers
in the middle
• Delayering helps lowering costs.
• After delayering the structure becomes flatter with a
broader span of control. (don’t over do it it could
stress managers out)
• Delayering can give employees enhanced roles with
more responsibility
• Some business use delayering as an excuse to cut
jobs.
•
Pg 213 – 214 Hoang
Span of control
This refers to the number of subordinates
working under a superior or manager.
A narrow span of control has the advantage of a
firm of close supervision, better coordination
of activities, better communication – monitor
more closely
A wide span of control allows independent
decision making. – hard to manage effectively
Broad (wide) vs Narrow span of
control
• Too narrow – staff become de-motivated –
being over-managed
• Too broad – hard to manage effectively.
Activity
Construct an organisation chart of AIS.
Identify:
Chain of command
Span of control
Delegation
responsibility
Activity
Job Roles
Investigate:
The key responsibility of the following person –
•
•
•
•
•
CEO/Chair Person
Board of Directors (BoD)
Management
Supervisors & team leaders
Other employees (operatives)
Higher Level
Delegation &
Accountability
Delegate
What is it?
Why do it?
What are the problems with doing it?
Pg 111
Channel of communication
Purpose of communication in Business:
Communication is essential to the
achievement of business objectives.
• This is because the basic purpose of any
communication is to influence the actions of
others.
• Effective communication is therefore an
essential aspect of management
Purpose of communication in
Business:
• Goals must be established for the organisation and then
communicated to objectives
• Communication is vital to the development of plans
• Communication is also essential in the organisation of both
human and non-human resources
• Leading, directing and motivating inevitably require
communication skills
• The control function cannot be effective without the
communication of accurate and up-to-date data
Different types of communication:
Direction
Recap:
• Chain of command
• Span of Control
Classification of communication:
Direction
Vertical and Lateral
• Vertical: Up and down the organisation
• Lateral: Communication across the
organisational
Communication by direction
• Downward – giving orders, instructions,
communicating objectives
• Upward – reporting back, expressing views
• Horizontal – co-ordinating, problem solving
Classification of communication:
Formality
• Formal and Informal
• Formal – Using channels of communication
• Informal– Channels established by the
employees themselves (passes information
quickly but usually distorted).
Direction
• Where there is no facility for a reply
(feedback), it is called one-way
communication
Sender
Receiver
• Feedback built into two-way communication
is a feature of a democratic leadership style
Sender
Receiver
Feedback
• Sender receives feedback e.g manager
discusses an issue with an employee at a
meeting.
• This is slower than one way but sender gains
more information.
Sender
Receiver
Why is the facility for feedback important?
• Feedback ensures message is fully understood
• Feedback enables subordinates to contribute
to the process of decision making
Activity
Different structures Investigate:
• Organisation by Product
• Organisation by Process
• Organisation by Geography
Factors influencing structures
• Pg 111
Summary
• Why do organisations need formal structure?
• What are the benefits of having a hierarchal
structure?
• What are the drawbacks of having a hierarchal
structure?
• What is meant by ‘a wide span of control?’
• What does ‘tall’ and ‘flat’ mean in relation to
organizational structures?
Higher Level
• Pg 215
Bureaucracy
Higher Level
Centralised and Decentralised
Pg 216 - 217
• Centralisation and decentralisation refer to
the extent to which authority is delegated in a
business.
• If there was complete centralisation, then
subordinates would have no authority at all.
• Complete decentralisation would mean
subordinates would have all the authority to
take decisions.
Centralised
• Advantages
• Disadvantages
Decentralised
• Advantages
• Disadvantages
Centralised and Decentralised
Question on which to become would depend on –
• Size
• Scale
• Level of Risk
• Corporate culture
• Management attiudtes and compentecies
• The use of ICT
Pg 218
Higher Level
Matrix structure/Project Teams/Flexible
Structure/The informal
Mintzberg/Peters
• Clarke 105 - 107
Higher Level
Outsourcing, off shoring and the
migration of HR
Pg 223- 225
Outsourcing – the act of finding external people or businesses to carry out
non-core functions of a business, such as cleaning or ICT maintenances.
Offshoring – a form of outsourcing that involves relocating buisness functions
and processes to another country
Migration refers to the international movement of labour
TOK
To what extent can great
military leaders of the
past guide chief
executives officers who
are shaping the
structure of their
organisation?
Plenary
Level achieved_____
What do you now know as a
result of today’s lesson?
What are your areas for improvement?
What are you going to do about this?