Organisational structure ( A level)
Control, authority and trust
conflicts between control and trust that might arise when delegating delegation involves a manger showing trust in a subordinate- to the extent that less control will be exercised over their work -However, some managers do not like giving up control. They may feel less important if they do so they may not wish to take any risks at all. (these managers are not good delegators) -there is conflict between showing trust in a worker and controlling the worker's efforts -effective delegation means slowly releasing management control in order to show more trust
Difference between authority and responsibility
delegation gives subordinates the authority to perform certain tasks -> if the job is done poorly then they are held accountable -> however, the overall responsibility for the work of the department, including the performance of each subordinate, rests with the manager Authority is the legal right to give the command, order or instruction and compel the subordinates to do a certain act. Authority is the power or legal right to give orders, make decisions, and enforce obedience. Responsibility is the outcome of authority. It entails the obligation of the subordinate, who has been assigned the duty by his superior. responsibility is the state or fact of being accountable or to blame for something
Centralisation
advantages and disadvantages of centralization for stakeholders centralization is keeping all the important decision-making powers within head office or the center of the organisation with centralization there is minimum delegation to managers in other areas, departments or divisions of the business a centralized organisation would insist on all sections of the business following the same procedures. allows for uniformity and consistency centralized businesses will want to maintain exactly the same image and product range in all areas. stakeholders are people, group or organization that has interest or concern in an organization. Some examples of key stakeholders are creditors, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources. advantages - senior managers take decisions in the interest of the whole business- not just one division of it -senior managers at central office will be experienced decision-makers. -a fixed set of rules and procedures in all areas of the firm should lead to rapid decision-making-there is little scope for discussion -the business has consistent policies throughout the organisation. This prevents any conflicts between the divisions and avoids confusion in the minds of consumers. -central buying should allow for greater economies of scale. .disadvantages -1. Delay in work—Centralisation creates loss of man-hours and delay in performance of work because of transmission of records from and to the central control room. Quick decision is not possible which also results delay in office work. 2. Remote control—Better supervision is not possible as the executives are under heavy pressure of work. Slackness in work is developed in the absence of better control and supervision. 3. No loyalty— In centralisation there is no subordinate's initiative in work because they are required to do such works which they were asked for. Workers work like machine which results in no involvement in work and absence of zeal. All these factors stand as barrier in the development of loyalty to work. 4. No Secrecy—Secrecy is not possible in centralised set up organisation because here orders and decisions flow from one place and are conveyed to all. 5. No special attention—In centralization no special attention is given to special work as all works are done at one place.
Delegation and accountability
advantages and disadvantages of delegating delegation means the passing down of authority to perform tasks and take decisions from higher to lower levels in the organisation. advantages - gives senior managers more time to focus on important, strategic roles (example) - shows trust in subordinates and this can motivate and challenge them -develops and trains staff for more senior positions -helps staff to achieve fulfillment through their work (self-actualization) disadvantages - if the task is not well-defined or if inadequate training is given, then delegation is unlikely to succeed -delegation will be unsuccessful if insufficient authority(power) is given to the subordinate who is performing the tasks. -managers many only delegate the boring jobs that they do not want to do- this will not be motivating
Types of structure: functional, hierarchical (flat and narrow), matrix
advantages and disadvantages of the different types of structures [hierarchical/ bureaucratic (flat and narrow)], matrix and functional A bureaucratic/hierarchical organization is a form of management that has a pyramidal command structure. advantages -Everything in hierarchical organisational structure is going to be organized and stabilized and it is less likely to get authority and obligation disordered -All the employees know exactly what position they are in and also know what job they have to do - the objective will be clear so the task can be done in time - There is a clearly identifiable chain of command. disadvantages - such a structure tends to suggest that one way communication ( top-> bottom) is the norm- it is rarely the most efficient form - there are few horizontal links between the departments or separate divisions, and this can lead to lack of coordination between them. -managers are often accused of tunnel vision because they are not encouraged to look at problems in any way other than through the eyes of their own department - very inflexible type of structure and often leads to change resistance. This is because all managers tend to be defending both their own position in the hierarchy and the importance of their own department. flat organisational structure A flat organization refers to an organizational structure with few or no levels of management between management and staff level employees. The flat organization supervises employees less while promoting their increased involvement in the decision-making process.( laissez-faire) advantages It elevates the employees' level of responsibility in the organization. It removes excess layers of management and improves the coordination and speed of communication between employees. Fewer levels of management encourage an easier decision-making process among employees. Eliminating the salaries of middle management reduces an organization's budget costs. disadvantages Employees often lack a specific boss to report to, which creates confusion and possible power struggles among management. Flat organizations tend to produce a lot of generalists but no specialists. The specific job function of employees may not be clear. Flat structure may limit long-term growth of an organization; management may decide against new opportunities in an effort to maintain the structure. Larger organizations struggle to adapt the flat structure, unless the company divides into smaller, more manageable units. The matrix structure A matrix organizational structure is a company structure in which the reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy employees have dual reporting relationships - generally to both a functional manager and a project manager. advantages - it allows total communication between all members of the team, cutting across traditional boundaries between departments in a hierarchy where only senior managers are designed to link with and talk to each other - there is a less chance of people focusing on just what is good for their department- employees feel good for the project and business as a whole - the crossover of ideas between people with specialist knowledge in different areas tends to create more successful solutions - as new project teams can be created quickly, the system is well-designed to respond to changing markets or technological conditions disadvantages - there is less direct control from the top as the teams may be empowered to undertake and complete a project - the passing down of authority to more junior staff could be difficult for some mangers to come to terms with - team members may have, in effect, two leaders if the business retains levels of hierarchy for departments but allows cross-departmental teams to be teams to be created. This could create a conflict of interests. the functional structure ( departmentalization ) A functional organization is a common type of organizational structure in which the organization is divided into smaller groups based on specialized functional areas, such as IT, finance, or marketing. advantages allows greater operational efficiency because the employees have their skills and knowledge to be shared within the group. The team is managed by an experienced person with a high ability and skills who can adequately understand and review the entire work. The team members work with other people in the field and it allows sharing of thoughts and knowledge to make the people learn new skills. The staffers have the chance to get promoted within their functional areas which can be a reason for them to stay long term. The company is getting the advantage of their expertise and knowledge. Because of people's expertise, the workers with specialized skills can perform tasks quickly, efficiently and with more confidence, while reducing of work-related mistakes. The clear nature of the career path within the functional unit makes it possible for employees to be highly motivated to advance their careers as they move up within the hierarchy. This will keep them aiming for advancement and development. This can be an ideal structure for small businesses that focus on one product or service because you can maximize performance by encouraging peer cooperation among different units at various levels of management through supervision and coordination. (Specialization leads to operational efficiencies and enhances productivity levels.) disadvantages The functional organization may have unhealthy competition working with the other areas. There may be a lack of understanding as to how significant that specific are to the company. In one example, there may be a request from the marketing department which may not be prioritized in order to attend to the concerns of the sales department by adding more people. Ideally, the companies decide based on what is urgently needed. Because the people in the functional organization are grouped according to their special set of skills, roles or task, the entire team will operate well. However, the business strategies and the level of bureaucracy make it difficult to respond to changes immediately. Another disadvantage of functional organization structure is that these functional groups may not be able to communicate more often which decreases flexibility and innovation. When a company uses this type of structure, it groups its people according to their knowledge and skills which help them become specialists on that field. It also requires a management system which allows promotion, development and visibility of skills of people in each functional area. It helps to bring in-depth knowledge and skill development among the employees to achieve the goals of the company. Management issues may arise because it is more bureaucratic and the functional organization are not accountable to each other and the poor horizontal coordination within the department may occur. Employees' motivation is greatly affected by lack of innovation and restricted views of organizational goals. This structure can be rigid and the standardized ways and high formalization can hamper or impede faster decision making. Another weakness of functional organizational structure is there could be lack of unit coordination. This means that though the functional units can perform with higher level of efficiency however, there could be difficulty working well with each other thus, cooperation is compromised. Some people may be territorial or there may be some who are unwilling to cooperate. These unhealthy coordination may lead to delays, reduced commitments, competing interests, waste of time, and getting late in finishing the project.
Line and staff
examples of and distinctions between line and staff management; conflict between them line managers are managers who have direct authority over people, decisions and resources within the hierarchy of an organisation line managers are those who have authority over others in a hierarchical structure. line managers have responsibility for achieving specific business objectives. e.g sales director will have line authority over the sales managers for each of the different products the firm sells. staff managers are those who, as specialists, provide support, information and assistance to line managers. staff mangers do have line authority over others. They are specialists who are employed to give advice to senior line managers. e.g economists, specialist market researchers, scientific experts advising on the environmental impact of certain products or processes They perform a supporting role to line managers, but do not take decisions. well paid and often accused of having less loyalty to the business as their services might be in great demand by a wide range of firms. arguments of line executives against staff - dilution of authority - staling show - lacks of practical knowledge - lacks human skills -domination of manager -easy access to top management - stress on paper work arguments of staff executives against line managers -resistance to new plans and ideas - inadequate support from line executive - inadequate scope for use of authority - lack of support from to management - limited co-operation from line executive -supply of inadequate info - absence of authority
Formal and informal organisations
features of a formal structure; levels of hierarchy, chain of command, span of control, responsibility, authority, delegation/accountability, centralised/decentralised The Formal organizational structure (also just organizational structure) is an officially codified hierarchical arrangement of relationships between different jobs within the organizational units and relationships between departments within the organization (shown in a Organigram). It includes hierarchical relationships and assigns competence, ties and responsibilities. A formal organizational structure is necessary for the management of a bigger number of people, because it unites different business activities, processes and people and formalizes their relationships to achieve the common objectives of the organization. There is no optimal organizational structure. There are only organizational structures that optimize the deployment of management and staff to achieve the organization's goals. The formal organizational structure of an organization is a type of a social network. Depending on the type and size, there are different typologies of formal organizational structures. The formal organizational structure includes: Functional Organizational Structure Linear Organizational Structure( Each superior has clearly assigned subordinates and each subordinate has clearly assigned superior) Matrix Organizational Structure Staff & Line Organizational Structure ( Staff & Line organizational structure is one of the types of the formal organizational structure. It is based on the arrangement of linear organizational structure extended by the staff departments that provide support for management activities for different hierarchical levels and areas of the operation of the organization.)
Delegation and accountability
processes of accountability in a business Accountability is an assurance that an individual or an organization will be evaluated on their performance or behavior related to something for which they are responsible
Relationship between business objectives, people and organisational structure
purpose and attributes of an organisational structure (flexibility, meet the needs of the business, permit growth and development) - indicates overall responsibility for decision-making - indicates formal relationships between different people and departments - indicates the way in which accountability and authority may be passed down the organisation- chain of command - indicates the number of subordinates reporting to each more senior manager- span of control - indicates the formal channels of communication both vertical and horizontal- this will aid the investigation of communication problems if messages are not being received in time by the people - identifies the identity of the supervisor or manager to whom each worker is answerable and should report to is made clear.
the reasons and ways structures change e.g. with growth or delayering (the action or process of reducing the number of levels in the hierarchy of employees in an organization)
reasons- disruptive innovation and new technologies, to changing market conditions and the need to improve quality, productivity or profit. to achieve its strategic objectives. needs to make changes when it reaches a new stage in its life cycle. business growth change in management, e.g taking on a partner moving into new product lines expanding your business overseas. external factors -address new markets -react to changes in product or service demand -keep up with new technologies or products from competitors -mergers and acquisitions -joint ventures and business -partnerships preparing to sell your business internal factors -to raise additional capital, improve cash flow or profitability of your business -to address outdated and inefficient working practices and processes -to eliminate excess job positions and remove duplicate management roles -to reorganize your internal functions for efficiency, such as sales and marketing
Delegation and accountability
relationship between delegation and accountability delegation involves a manager showing trust in a subordinate- to the extent where less control will be exercised for this to be effective- it means delegators have to release management control in order to show more trust empowerment herzberg's motivators= "this process can be very beneficial to motivation" the wider the span of control, the greater the degree of delegation delegation gives subordinates authority to perform tasks- they have power to undertake jobs and make decisions necessary for jobs to be completed. If job is done poorly, then worker is accountable to his/her immediate manager. The manager should 'carry the can' subordinates are accountable to the manager for good performance;but the manager retains ultimate responsibility for the work done in the department whether it was delegated to others or not.
Control, authority and trust
relationship between span of control and levels of hierarchy A span of control is the number of subordinates reporting directly to a manager It can either be wide- with a manger directly responsible for many subordinates- or narrow- a manager has direct responsibility for a few subordinates A wide span of control is likely to encourage delegation. it has a flat organisational structure Narrow span of control- likely to lead to close control of subordinates. This is a tall organisational structure. A large span of control means that a manager has a large number of staff under their direct control, while a small span of control means that each manager looks after a small group of staff.
Delegation and accountability
the impact of delegation on motivation As Herzberg and other researchers pointed out, this process can be very beneficial to motivation. Theories that can assist organizations into effectively motivating their employees include Herzberg's Motivation-Hygiene Theory, Maslow's Theory of Motivation as well as Vroom's Expectancy Theory of Motivation. Herzberg (1965) identified job satisfiers as employee motivating factors. These job satisfiers include achievement, recognition, responsibility and an opportunity for advancement. Herzberg found that these satisfiers directly attributed to motivating employees to achieve high levels of performance.
Types of structure: functional, hierarchical (flat and narrow), matrix
why some organizations are structured by product/ dividional structure and others by function or geographical area Product organisational structure is a framework in which a business is organised in separate divisions, each focusing on a different product or service and functioning as an individual unit within the company. you assign employees into self-contained divisions according to: the particular line of products or services they produce the customers they deal with the geographical area they serve structure may have several layers of managers and employees where each division can have its own marketing team, its own sales team, and so on. Certain key functions (e.g. finance or human resources) may be provided centrally. In a product organisational structure, manager typically reports to the head of the company by product type, e.g sporting goods, housewares and general merchandise. geographical organisational structure -Some businesses organize their activity according to geographical area or location. This is common in large multinational companies, but it may also suit medium-sized businesses. For example, a group of taxi firms, a small retail chain or a fast-food chain with several branches. Geographic organisational structure suits mainly industries like retail and hospitality, transportation and other businesses that need to be near sources of supply and customers (e.g for deliveries, production or on-site support).
