2.

2 Organisation and Management

Key Terms

Organisational structure definition: the levels of management and division of responsibilities in an organisation
Organisational chart definition: a visual representation of the organisational structure, showing who reports to
whom.
Line Manager definition: a manager directly in charge of a worker (above their subordinates on an org. chart)
Subordinate definition: a worker who reports to their line manager (below their line manager on an org. chart)
Delegate definition: giving authority for a task to a subordinate (e.g. when a manager gives responsibility to a
worker)
Span of control definition: the number of subordinates working directly under a manager
Chain of command definition: the path of authority passed from senior management to workers

LO1: To draw, interpret and explain organisational charts

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Organisational Charts

Features: Employees are arranged in a HIERARCHY based on their role, responsibilities and RELATIONSHIP with
other employees. Employees are arranged by DEPARTMENT, such as Marketing, Human Resources or Finance

Advantages

✓ Employees are aware of their position in the organisation

✓ It gives a sense of belonging
✓ Shows all relationships and communication channels in the organisation
✓ Shows links between the departments

Chain of Command and Span of Control

Can you explain this: “Business A has a ‘tall’ structure and a ‘long chain of command’?

Business A has 4 layers of employees. Messages will pass from top to bottom more slowly. Each manager only has a
span of control of 2 workers.

Can you explain this: “Business B has a ‘wider’ structure and a ‘short chain of command”?

Business B has 2 layers of employees. Messages will pass from top to bottom more quickly. The manager has a span
of control of 5 workers.

The levels of an organisation are called layers.

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What is de-layering and why do businesses do it?

Delayering is the process of removing layers / levels of managers. It is usually done to cut costs but is also used to
improve and speed up communication and decision making.

Benefits of a flat structure Problems of a flat structure

✓ Communication is quicker and more accurate
✓ Management are more in touch with the people
below them
✓ Spans of control will be wider
✓ Managers will delegate more
× Fewer management positions – less chance of
promotion
× Difficult for manager to monitor performance

More delegation is an advantage because workers feel more trusted. They might also get to make more decision
which could lead to greater job satisfaction.

Benefits of a tall structure Problems of a tall structure

✓ More managers → easier to monitor employee × Communication takes longer

performance × More managerial positions → higher salary costs.
✓ More chance of promotion → motivating Businesses can cut costs by removing a layer of
management which is called → delayering

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Roles, Responsibilities and Inter-relationships

Line managers: These managers have direct responsibility over people below them in the hierarchy

Role Responsibility Inter-relationship

➢ Appointed by shareholders to run the

business
➢ Work closely with managers and shareholders
➢ Hold an AGM (Annual General Meeting) to
Directors to ensure the business is achieving its aims &
review progress
objectives
➢ Set the vision, strategy and structure of the
business

➢ In charge of the employees and the ➢ Relay messages between directors and
Managers business → assign tasks and roles employees
➢ Monitor progress & performance ➢ Work closely with supervisors

➢ Normally in charge of a small group of

➢ Work closely with specific groups of employees
Supervisors people responsible for a specific task
➢ Feedback to managers
➢ Have less responsibility than managers

➢ May have close relationship and give feedback

Other ➢ Have a duty to complete their set roles and
to managers and supervisors – it depends on
employees tasks to the right / appropriate standard
the business

The role of management

Planning Controlling

What do
managers do?
Organising Commanding

Coordinating

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PLANNING

➢ A manager must set aims / objectives / targets for the business and also for the workers
➢ These give the business a sense of direction and purpose
➢ A manager must also plan for the resources that will be needed

ORGANISING

➢ A manager cannot do everything! Because of this, managers must organise people and resources effectively
➢ Making an organisational chart is very helpful to show authority
➢ The chart is also helpful so all workers know what they are supposed to do and see who is responsible for
who and what

COORDINATING

➢ This means ‘bringing together’

➢ This is very important because different departments in a company need to work together
➢ A manager must make sure all of the departments work together and communicate
➢ This can be done by having a meeting with all of the department heads

COMMANDING

➢ A manager must guide, lead, supervise and also command people what to do
➢ Managers must make sure the workers are meeting their targets and deadlines
➢ Managers should share their experience and expertise to help the workers become more efficient

CONTROLLING

➢ This task never ends for management

➢ Managers must measure and evaluate the work of everyone in the company
➢ They must find the employees that are not doing their work efficiently and discipline them
➢ If there are reasons why the employees are not being efficient, they must find these reasons and fix them

Delegation

Delegation definition: giving authority for a task to a subordinate (e.g. when a manager gives responsibility to a
worker). However, the manager is still ultimately responsible for the task.

Advantages of delegation to the manager Advantages of delegation to the subordinate

× Workers feel more empowered and that they are

✓ Reduced workload for the manager
trusted and important
✓ Manager can focus on other tasks and overseeing
× It can make work more interesting and rewarding.
the department
× Training should be provided which will lead to future
✓ Monitor and measure staff more closely
career opportunities (internally & externally)

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Why might a manager choose not to delegate?

They might be worried that their workers will do better than them. They might also not trust them.

Delegation is a balance between trust and control. Managers are more likely to delegate if they trust their
subordinates. The more they delegate, the less control they have → greater risk

To motivate To give guidance &

employees advice

Why is it important
to have a good
To increase the manager?
profitability of the To control costs
business

To inspire
employees to
achieve more

Leadership Styles - Anyone in an organisation can show leadership qualities

Quote: "The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the
people to do the greatest things." --Ronald Reagan

Be honest and have

Confidence and integrity
self-belief Have vision and
purpose

Characteristics
Strong of a leader
communication Inspirational
skills

Committed and
dedicated

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LEADERSHIP STYLE 1: AUTOCRATIC LEADERSHIP

➢ The manager is in charge

➢ The manager expects everyone to do what they say
➢ The manager makes all the decisions
➢ The manager only tells the employees what they need to do know
➢ The communication only goes downwards

When is this style best used? What might be some problems of this style?

✓ When quick decisions need to be made × People may feel dominated

✓ Crisis situations × Feelings of being ignored, resentment and
✓ A manager with a controlling personality demotivation

LEADERSHIP STYLE 2: DEMOCRATIC LEADERSHIP

➢ Managers get workers involved in decision making – though managers still make the final decision
➢ Information will be discussed openly with workers.
➢ Teamwork and discussion of ideas is encouraged
➢ Communication goes both goes up and down

When is this style best used? What might be some problems of this style?

✓ Highly trained and skilled teams × It can take time for decisions to be made
✓ When workers need to feel valued and recognised × Can lead to split opinions and possible conflict over
✓ When creating a sense of belonging the best direction a business should take

LEADERSHIP STYLE 3: LAISSEZ-FAIRE LEADERSHIP (Means “let it be” in French)

➢ The leader sets the aims and objectives and the workers are left to do what they think is best and to
organise their own work
➢ Communication can be difficult because there is no structure.
➢ The leader has only a limited role to play.

When is this style best used? What might be some problems of this style?
✓ For a manager with a laid back and relaxed
× Some workers might slack off and produce
personality
minimum amounts of work without supervision
✓ Highly skilled and motivated workers where they
× Work might not meet the expectations of the
have pride in the quality of their work
manager
✓ Design / marketing jobs good examples

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Different situations require different managerial and leadership styles. Can you think of any examples?

The context and Experience, skills

situation faced and training

Factors affecting
leadership style
Personality of the Culture of the
leader company (or
leader)
Type of workforce –
skill & motivation
level

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Trade Unions

What is a trade union?

A trade union is a group of workers who have joined together to ensure their interests are protected. Common
interests and demands that workers have are higher pay, having a nice work environment, being fairly treated,
adequate and appropriate training & working in a safe working environment.

Collective bargaining

➢ This describes the negotiation between an employer and a trade union. The more members a union has, the
stronger they are and they are also stronger when there is only one union.

➢ Multiple unions with different priorities make it harder for them to negotiate.

Benefits of joining a trade union:

✓ Strength in numbers
✓ Improved working conditions (pay, holidays, & hours)
✓ Better work environment (health, safety, noise, & heating)
✓ Benefits for being sick, hurt, retired, and becoming redundant (machine takes their job)
✓ Improved job satisfaction through training
✓ Advice for when employees are fired, treated unfairly, or asked to something that isn’t their job
✓ Discounts from certain shops, sports facilities and clubs
✓ Employment when there is a closed shop.
✓ A closed shop is all employees must be members of the same trade union.

Disadvantages of joining a trade union:

× It costs money to join (usually an annual fee)

× You may be required to take industrial action, e.g. a strike – even if you don’t agree

Trade unions also seek to…

➢ Publicise their views to the media to influence government decisions, e.g. minimum wage laws
➢ Improve communication between workers and management

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