Org structure 2 HL

Human Resources
Organisational Structure
Learning Objectives
• Analyse delegation and accountability
• Understand the meaning of bureaucracy
• Understand the difference between
centralised and decentralised structures and
the factors that influence the degree of it
Delegation and Accountability
Passing authority down the
organisational hierarchy
businesses will
The obligation of an individual to
account for his or her activities and
to disclose results in a transparent
Important principles that can
affect organisational
structure and levels of
• Delegation involves the passing of authority
down the hierarchy
• Authority occurs when an employee is given
the right to do something by their superiors
• This will:
- Free up time for management
- Motivate workers by providing them with greater
• To reduce the size of a business hierarchy,
especially in terms of a reduction in
management and costs
• This creates a flatter (less layered)
organisational structure
• But what does this involve?
It leads to:
• Wider spans of control
• Increased delegation to subordinates
Hierarchical /
Bureaucratic structure
This is called
• An organisational system with standardised
procedures and rules
Centralised Organisations
• What are they?
– Organisations where important decisions are taken at the centre
and then passed out to the various departments / locations
• Advantages
Tight control of decisions
Decisions made by senior management
Helps decisions to be consistent across the business
Avoids repetition of functions (e.g. only one purchasing
• Disadvantages
– Lack of motivation for managers
– Central management may be “out of touch”
– May be slow to make decisions that need to taken quickly
De-Centralised Organisations
• What are they?
– Organisations where important decisions are delegated to
managers in other departments / locations
• Advantages
Increased motivation of managers
Encourages local initiatives
Decisions based on more up-to-date information
Decisions made quicker
• Disadvantages
– Managers may lack experience
– Local decisions may be inconsistent with the overall business
aims and objectives
– Duplication of functions and costs
The Matrix Structure
• A structure that creates project teams that cut
across traditional functions / departments
• Used to eliminate the many problems that
arise with a hierarchical structure
Project Teams – Gathers together a team of specialists which form a team
Matrix Structure
The flexible future
• The external environment is changing at a
rapid pace, therefore businesses adapt and
this is often done through retrenchment or
Henry Mintzberg
• According to renowned management theorist
Henry Mintzberg, an organization's structure
emerges from the interplay of the organization's
strategy, the environmental forces it experiences,
and the organizational structure itself
• When these fit together well, they combine to
create organizations that can perform well
• When they don't fit, then the organization is
likely to experience severe problems
Henry Mintzberg
• Different structures arise from the different
characteristics of these organizations, and
from the different forces that shape them
(which Mintzberg calls the "basic pulls" on an
organization). By understanding the
organizational types that Mintzberg defines,
you can think about whether your company's
structure is well suited to its conditions. If it
isn't, you can start to think about what you
need to do to change things
Mintzberg's Organizational Types
The main successful organizational structures that he
identifies are as follows:
1. The entrepreneurial organization
Flat structure, relatively informal, lack of standardised
procedures, flexibility
2. The machine organization (bureaucracy)
Standardisation, inflexible, tall structure
3. The professional organization
Specialisation by experts, decentralised
4. The divisional (diversified) organization
Different product lines,
5. The innovative organization ("adhocracy")
Tom Peters – Seven S Model
Based on the theory
that an organisation
is made up of seven
Practical and
Less tangible, and easy
to identify, determined
by the people at work
in the organisation
This model helps to increase managers’ awareness of the less tangible but critically
important factors required for an organisation to be successful
Informal Organisations
• The culture of people and groups within a
• An informal organisation is a network of
personal and social relations that develop
between people within an organisation
• Individuals’ effectiveness can greatly be
affected by the people with whom they work
• Good managers will try to use informal groups
to the benefit of the business
Outsourcing HR Functions
• Functions being outsourced may include:
– Payroll management
– Fringe benefits administration
– Legal issues relating to employees
– Recruitment
– HR record keeping
HR Outsourcing
Reasons and benefits
• Reduces costs
• Allows HR to be more
focused and strategic
• More expertise and services
• Less burden on leaner staff
• Streamlines HR functions
• Limits risks borne by HR
• Offers flexibility for HR
• Unexpected cost impact
• Organisational resistance
• Reduced service levels
• Changes in the HRO
vendor's business
• Other vendor management
• Organisational worries