Organizational Structure

Organizational structure refers to the levels of management and division of

responsibilities within a business. They can be represented on organizational charts
(left).
 

Advantages:
 All employees are aware of which communication channel is used to reach them with
messages
 Everyone knows their position in the business. They know who they are accountable to
and who they are accountable for
 It shows the links and relationship between the different departments
 Gives everyone a sense of belonging as they appear on the organizational chart
 

The span of control is the number of subordinates working directly under a manager in

the organizational structure. In the above figure, the managing director’s span of control
is four. The marketing director’s span of control is the number of marketing managers
working under him (it is not specified how many, in the figure).
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The chain of command is the structure of an organization that allows instructions to be

passed on from senior managers to lower levels of management. In the above figure, there
is a short chain of command since there are only four levels of management shown.
Now, if you look closely,there is a link between the span of control and chain of
command. The wider the span of control the shorter the chain of command since more
people will appear horizontally aligned on the chart than vertically. A short span of
control often leads to long chain of command. (If you don’t understand, try visualizing it
on an organizational chart).
Advantages of a short chain of command (these are also the disadvantages of a long chain
of command):
 Communication is quicker and more accurate
 Top managers are less remote from lower employees, so employees will be more
motivated and top managers can always stay in touch with the employees
 Spans of control will be wider, This means managers have more people to control This is
beneficial because it will encourage them to delegate responsibility (give work to
subordinates) and so the subordinates will be more motivated and feel trusted. However
there is the risk that managers may lose control over the tasks.
 

Line Managers have authority over people directly below them in the organizational
structure. Traditional marketing/operations/sales managers are good examples.
Staff Managers are specialists who provide support, information and assistance to line
managers. The IT department manager in most organisations act as staff managers.
Management
So,, what role do manager really have in an organization? Here are their five primary
roles:

 Planning: setting aims and targets for the organisations/department to achieve. It will

give the department and it’s employees a clear sense of purpose and direction. Managers
should also plan for resources required to achieve these targets – the number of people
required, the finance needed etc.
 Organizing: managers should then organize the resources. This will include allocating
responsibilities to employees, possibly delegating.
 Coordinating: managers should ensure that each department is coordinating with one
another to achieve the organization’s aims. This will involve effective communication
between departments and managers and decision making. For example, the sales
department will need to tell the operations dept. how much they should produce in order
to reach the target sales level. The operations dept. will in turn tell the finance dept. how
much money they need for production of those goods. They need to come together
regularly and make decisions that will help achieve each department’s aims as well as the
organization’s.
 Commanding: managers need to guide, lead and supervise their employees in the
tasks they do and make sure they are keeping to their deadlines and achieving targets.
 Controlling: managers must try to assess and evaluate the performance of each of their
employees. If some employees fail to achieve their target, the manager must see why it
has occurred and what he can do to correct it- maybe some training will be required or
better equipment.
Delegation is giving a subordinate the authority to perform some tasks.
Advantages to managers:
 managers cannot do all work by themselves
 managers can measure the efficiency and effectiveness of their subordinates’ work
However, managers may be reluctant to delegate as they may lose their control over
the work.

Advantages to subordinates:
 the work becomes more interesting and rewarding- increased job satisfaction
 employees feel more important and feel trusted– increasing loyalty to firm
 can act as a method of training and opportunities for promotions, if they do a good job.
 

Leadership Styles
Leaderships styles refer to the different approaches used when dealing with people when
in a position of authority. There are mainly three styles you need to learn: the autocratic,
democratic and laissez-faire styles.
Autocratic style is where the managers expects to be in charge of the business and
have their orders followed. They do all the decision-making, not involving employees at
all. Communication is thus, mainly one way- from top to bottom. This is standard in
police and armed forces organizations.
Democratic style is where managers involve employees in the decision-making and
communication is two-way from top to bottom as well as bottom to top. Information
about future plans is openly communicated and discussed with employees and a final
decision is made by the manager.
Laissez-faire (French phrase for ‘leave to do) style makes the broad objectives of the
business known to employees and leaves them to do their own decision-making and
organize tasks. Communication is rather difficult since a clear direction is not given. The
manger has a very limited role to play.
Trade Unions
A trade union is a group of workers who have joined together to ensure their interest are
protected. They negotiate with the employer (firm) for better conditions and treatment
and can threaten to take industrial action if their requests are denied. Industrial action
can include overtime ban (refusing to work overtime), go slow (working at the slowest
speed as is required by the employment contract), strike (refusing to work at all and
protesting instead) etc. Trade unions can also seek to put forward their views to the
media and influence government decisions relating to employment.
Benefits to workers of joining a trade union:
 strength in number- a sense of belonging and unity
 improved conditions of employment, for example, better pay, holidays, hours of work
etc
 improved working conditions, foe example, health and safety
 improved benefits for workers who are not working, because they’re sick, retired or made
redundant (dismissed not because of any fault of their own)
 financial support if a member thinks he/she has been unfairly dismissed or treated
 benefits that have been negotiated for union member such as discounts on firm’s
products, provision of health services.
Disadvantages to workers of joining a trade unions:
  costs money to be member- a membership fee will be required
 may be asked to take industrial action even if they don’t agree with the union- they may
not get paid during a strike, for example.