Organisational Structure of Two Businesses (ASDA and Cadbury’s)
The two companies that I chose to study for my report were ASDA and
Cadburys. I chose these companies because ASDA is a large national business
with many workers and the local Cadburys shop is a much smaller set up.
Although this is a national business, I will just be focusing on the local store. As
part of my report I will study the organisational structures, the functional areas
and the communication within these businesses.
An organisational structure is the way in which a business is organised so
that its employees know which job roles they are meant to be doing and who to
communicate to internally in a business. The more layers there are in an
organisational structure, the longer the chain of command. A long chain of
command can mean that communication becomes distorted as it has to be
passed down through many different levels. A wider structure is usually better in
a business such as the ASDA because the message has to be passed through a
smaller chain of command which can improve communication. In a wider
structure messages can become distorted if the span of control is too large and
one person is in charge of too many people, however ASDA makes sure that this
doesn't happen. An organisational structure will include a hierarchy which has all
the functional areas such as finance and marketing, and will show who is in
charge of who.
The organisational structure of ASDA is a flat structure. A flat
organisation is opposite to a tall organisation and will have relatively few layers
which means that the chain of command from top to bottom is short and the
span of control (who reports to who) is wide. CJ, a director of ASDA, told us that
'the organisational structure has 5 layers from the top to the buying managers,
and only 7 layers from the colleagues to the CEO!' This shows that the chain of
command is quite small as it is only 6 from top to bottom, but the span of
control will be quite large, as figure 1 shows that even the CEO has a span of
control of 6, and this will increase as it goes down, making the structure wide
and flat. This flat structure is to 'give power to employees by making them a
greater part of the decision making process' CJ, a buyer for ASDA, June 2010.
This type of structure is a hierarchical structure and there are many advantages
to this such as better communication between workers because there are fewer
layers for information to be passed down and it will not be distorted. Also there
will be better unity and easier decision making because everyone gets to help
out and get a say in what happens as there is only a small chain of command
between the CEO and workers. To ASDA 'the most important thing is a clear
operating model' CJ, a buyer for ASDA, June 2010. There are fewer levels of
management which can benefit the business in ways such as lower costs for
wages because managers are generally paid more than workers. The ASDA
structure here suggests that the structure gets thinner; however the rectangles
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are just a representation of one Director. This would show how the structure
would get increasingly wider, as the span of control increases. All directors on
the second layer would have a span of control but for the purpose of this report I
have only shown retail and buying. My hierarchy shows the two different sides to the
structure. To the left side there is the retail director and on the left there is
thecommercial director. The retail manager and everyone under his span of control
would be under working for stores and management of stores, and everyone
under the commercial director would be dealing with buying and selling the stock
that the store sells.
Subsequently, I will look at my organisation structure for Cadbury's. I
looked at the organisational structure for the local Cadbury's shop and I found
that this was again quite a flat, wide structure. I think that this structure is also
a pyramid structure with 4 levels. A pyramid structure 'represents an
organisation that has progressively more people at each lower level',
(ActiveTeach page 29). This means that the chain of command is only 3 so again
the communication is a lot easier and messages don't get distorted easily. The
top layer in the shop would be the shop manager who will be in charge and he
would have a span of control of 1 assistant manager. This is because it is
important that managers aren't responsible for more people than the can
sensibly control', (ActiveTeach, page 29). This assistant manager is in charge of 2
supervisors and the supervisors are be in charge of 6 colleagues. This is very
small compared to ASDA because it is only a small, local shop. Nevertheless, a
structure is still needed because the business needs to be organised internally so
that it is clear who in charge and who is in control of whom so that they can ask
them to do specific jobs.
The structures are similar because they both have a short chain of
command and a wider span of control as the hierarchy descends. Also, both
have colleagues, supervisors and managers. However, they are still both very
different because one if from a small business and the other is from a large
business and because of this, ASDA has more levels and has more important
people such as a CEO and directors. In such a small shop the manager has
overall power, but as this is not a one off shop the company structure would be
very different.
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Asda Organisational Structure
Cadbury’s Organisational Structure
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