46 Organising people in a growing business

10/10 Key term tests - Organisational Structures

1. Organisational structure - the internal links between managers and workers showing lines of authority. 
2. Layers of management - the number of different levels of management and responsibility in a structure. 
3. Span of control - the number of junior employees each manager is directly responsible for.
4. Centralisation - senior managers take all the important decisions. 
5. Decentralisation - decision making power is spread to managers in branches and divisions of the business
6. Subordinates - those that report to a higher level within the structures.  Employees are subordinates of supervisors, supervisors of managers and managers are subordinate to directors
7. Line managers - an employee's immediate superior or boss. 
8. Supervisors / team leaders - these help managers to achieve their targets by reporting problems and passing on instructions.  They make simple decisions such as allocating jobs among different employees
9. Directors - set the long term plans and targets for the business
10. Business culture - like cultures in society the culture of a business is determined by the way people and teams interact with each other, their customers and other stakeholders.  Culture includes the companies vision values and beliefs and the rules and habits that  have evolved through the day to day running.

In the news: La Tasca in Oxford used to be a badly run operation owned an operated by a national chain.  It struggled to turn over sales and keep customers and staff did not stay long.  The new manager decide to change all that and two years later his ideas under the new ownership have been adopted by the company and the business is now doing well 

Span of control this is the number of people that a manager directly supervises. These people are also known as SUBORDINATES.  Responsibility is delegated to others and they are responsible for ensuring their work is carried out.  Power is delegated with this delegated responsibility to carry out the daily tasks and achieve the aims and objectives of the company.  One person cant supervise the entire workforce of a company but may be responsible for what everyone does i.e. Sue Croft  OSA & Mark Thompson - BBC  The number of people that a manager should supervise needs to consider - the physical location, complexity of task, ease of communication.

Layers of management - the organisational chart of OSA shows the different layers of management in the organisation - how many can you identify. Any more than three will make the communication slow and less effective.  A decision made by the Principal can be with all the staff by the next day or following week.  These lines of communication are important to stop people getting distracted or involved with areas of work that they are not responsible for.  Communications should follow up and down the same organisational structure if the organisation wishes to be effective.

Matrix hierarchies - this type of structure allows project teams to be put together for different jobs.  An Ofsted inspection or a road work project are good examples of this

Centralisation & decentralisation

Summary 

• Large businesses often produce an organisational chart to show the different functions of a business
• Organisational charts make it easy for outside people to understand how the business is split into different areas or functions
• The chart also makes it easier for employees to know who is in charge of the different parts, or functions, of the business
• An organisational chart can also give the impression that a business is well organised and professional.

Did you know... that the word hierarchy is Greek and was originally used to show who the important people in the Greek Church were.

Group activity Pu

Discussion Discuss whether a flat hierarchy would work better than one with more layers in it in OSA? 

Web-based activity Search the web to find more examples of organisational charts.  Comment on those that you find in terms of the number of layers and the span of control

Quick Quiz 15 Organising people in a business

1. Why is training so important for new OSA employees?
2. Describe two reasons why employees at OSA need to be well trained.
3. Explain using OSA as an example, what is meant by span of control.
4. What is decentralisation?
5. What is meant by delayering?
6. Give a reason why delayering might not work.
7. Give reasons why a business like OSA might outsource some of its jobs.
8. Give two reasons why a business like La Tasca might choose to decentralise.
9. Explain what a matrix hierarchy is. 

Worksheets

Nine mark questio