People in Business

Improving Organisational Structures

“ We don’t have as many managers as we should, but we would rather have too few than

too many.”

Larry Page

Improving Organisational StructuresIn this topic you will learn about:

• Key elements of organisational structures

• Workforce roles

• How organisational structure affects business performance

• Levels of hierarchy/Spans of control

• Work loads/Job allocation

• Delegation

• The communication flow

Key elements of Organisational Structure

Today’s lesson

Next lesson

What is organisational structure?

• Organisational structure refers to the way in which a firm is organised on a vertical level and a horizontal level.

• A vertical structure looks at the firm from the top to the bottom e.g. the Chief Executive, through different levels of management to the Shop Floor worker.

• A horizontal structure looks at how a firm is organised on the same level e.g. workers doing similar jobs such as supervisor or manager but in different functional areas or departments such as finance, marketing and sales.

Levels of hierarchy/Span of control

• The levels of hierarchy shows the number of levels of management and supervision within a business.

• The span of control shows the number of subordinates that a manager or supervisor is in control of.

• If a manager has many subordinates this is called a wide span of control.

• If they have few subordinates this is called a narrow span of control.

Organisation Charts

• We can use an organisation chart to show the levels of hierarchy and the span of control in a business

How large is the MD’s span of control?

How large is the Finance Manager’s

span of control?

How many levels of hierarchy are there?

What does an organisation chart show us?

• The routes by which communication passes through the business.

• Who has authority (power)

• The roles and titles of jobs within the business.

• The people to whom individual employees are accountable to & who they are responsible for.

Levels of hierarchy/Span of control

• The levels of hierarchy within firms will differ:

• tall and thin structures occur where each superior is responsible for a few subordinates.

• This allows for closer supervision and communication between the two levels.

• wide and flat means that each superior is responsible for a large number of subordinates.

• This requires greater delegation but fewer levels allowing for quicker communication through the firm.

Examples of organisational charts

For a typical Tesco’s store…..

Example: Tesco's Organisational Chart – based on store structure

Store Director

Store Manager

Personnel Manager Ambient Manager Fresh Manager Non Food Manager

Admin/personnel Assistants

Ambient Team Leader

Training ManagerStock Controller

ManagerSecurity Manager

Counters Manager (Deli, Curry Pot,

Pizza)

Bakery Team Leader

Restaurant Team Leader

Clothing Team Leader

Electrical TeamLeader

Stock ControlAssistants

Security Assistants

Team assistants

Customer Service Manager

Customer ServiceAssistants

CS Desk

Fresh Assistants

Non Food Assistants

Support Office

Regional Manager

How big is this Manager’s

Span?

How big is this Manager’s

Span?

8

3How many levels of hierarchy are there?6

Organisation Charts – Team work…

Using A3 whiteboards create an organisation chart for the school.

On your chart show the various senior team, departments, year groups and staff.

Try to work out:• the height of the hierarchy – is it tall or flat?

• the span of control of the different members of staff• are there any areas of contradiction?

• how efficient is this structure?

Workloads/Job Allocation

• Workload looks at the amount of work that an individual worker has to undertake. This will be influenced by the layers of hierarchy within a business….

• a narrow span of control is likely to lead to a greater workload.

• Job allocation looks at the type of work that an employee has been given to do. As a firm increases in size it is likely that the employees will be given increasingly specialised job roles e.g. Accountants or IT specialists.

Another example of an Organisation chart

What is the MD’s workload?What is wrong with

this?

How many levels of hierarchy are there?4

Workloads/Job Allocation

The AQA state that Workforce roles should include:

• Director – a senior manager elected by shareholders (includes MD) who oversee the running of the business.

• Manager - in charge of a number of subordinates and with responsibility for short and medium term decisions – including stock, materials and equipment.

• Team Leader – in charge of a group of employees covering specific tasks with a specific deadlines to be met.

• Supervisor – a junior manager in charge of lower grade workers

The organisation should look like….

Another activity

• Any business plc has a functional organisation structure.

• The MD is responsible to a chair person and has a sales director, a finance director, a personnel director and a production director accountable to her.

• On the production side there are a works manager, technicians, test engineers and machine operators.

• In addition, the company employs 5 personnel assistants, 4 financial staff and 10 administrative staff and 20 sales people.

• DRAW an organisation chart for Any Business plc from this information!

Plenary

• What does an organisational chart show?

• Who has the more senior position?

– Supervisor or Director?

– Team leader or Manager?

• What is the difference between workload and job allocation?