Unit 1:The Dynamic New Workplace

Organizational Structure & Communication

“There is no degree of human suffering which in and of itself is going to bring about change. Only organization can change things.”

Susan George (1950 - ), author

Structure This Unit looks at the various ways that businesses

organize their human resources. In a small business (sole proprietorship), there may

be an informal organizational structure the owner or boss has a range of job roles including

Marketing Operations Finance

they also carry out more mundane tasks such as being a sales person and a stock controller.

The sole trader changes roles depending on the demands of the job at a particular point in time.

Need for Structure

Accountability Shows who is held responsible (or answerable)

for what job

Responsibility Shows who is in charge of whom

Formal Organization

Takes into account Relationship between individuals Who is in charge Authority to make decisions How information is to be

communicated

Business Structure

Two types of structures are:Built up (develop)

Developed as a result of current skills employees possess

Created Appropriate jobs are determined and

employees are then hired

Organizational Charts

Illustrate the structure of a businessReasons for producing one include:

Identify communication problems Identifies a specific employee and their

respective responsibilities Pinpoints areas where specialists are needed Shows the relationships between departments

Example

Managing Director

Sales Director Finance Director Production Director

Sales manager Accountant Production Supervisor

Sales People Accounting Clerks Technicians Quality Control

Operators

Exercise – Ainscough Engineering

Chain of Command

Management hierarchy and span of control must be taken into account when setting up an organizational chart

Hierarchy Order of management from lowest to highest

Chain of command The way authority is organized

Span of Control

The number of subordinates working under a specific supervisor

Between three and six subordinates has been identified as the optimum span of control Tight managerial control Limitations to any managers ability to control large

numbers of people

Exercise – School Structure

Authority

Line Most common and shows authority a supervisor has over

a subordinate Work allocation and a clear understanding

Staff Manager in one department has authority in another

department

Functional A specialist has authority to make a manager accept

his/her recommendations

Delegation Passing of authority and responsibility down the

organizational chart Spetzer Study (1992) suggested employees need

to be empowered in order to make effective decisions

Requires planning and clear explanations Interference should be avoided Only suitable candidates should be asked

Mini Case Study

Case: Manchester Film AssociationSource: Business Studies, 3rd Edition; Hall, Jones,

Raffo, pg 412

Levels of Hierarchy

Refers to an organizational structure based on a ranking system

Those at the top include the CEOThose at the bottom include the most

unskilled employees in the organizationThe person directly above an employee on

the next level is known as the line manager

Advantages

Show clear lines of communication within the organization Which in turn improves coordination and

productivity

Establishes departments or teams Creates a sense of belonging in the workplace

and acts as a form of motivation

Limitations

Departmentalization can lead to isolation (within the organization as a whole)

Little contact with other departmentsThis might be problematic when external

influences force change in the hierarchical structure

Flat and Tall Organizations

Tall structures have many layers of organizational hierarchy

Each manager has a narrower span of control

By contrast, flat structures have fewer levels in the hierarchy, thus each manager has a wider span of control

The Inverse Relationship

List some advantages and disadvantages of each organization

Delayering

Process of removing one or more levels in the hierarchy in order to flatten out the organization structure

Reduces the numbers and widens the span of control

Exercise – Re-Engineering

Purpose of Delayering

Reduces cost by removing levels of management

Improves communication speed within the structure

Encourages delegation since wider spans of control should provide opportunities for employees to take on more responsibility

Downside of Delayering?

Often associated with layoffs, further reducing the size of the core staff

Creates anxiety and insecurityOverstretch employees as their workload

increasesDecision making ability is reduced as

managers take on more subordinates

Case Study – Havant College