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2.2 – Organization and Management

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

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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).

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.

Notes submitted by Lintha

Click here (https://igcseaid.wordpress.com/notes/business-studies-0450/2-3-recruitment-selection-

and-training-of-workers/)to go the next topic

Click here (https://igcseaid.com/mind-maps/business-studies-0450/2-1-motivating-workers/)to go

back to the previous topic

Click here (https://igcseaid.wordpress.com/notes/business-studies-0450/) to go back to the Business

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9 thoughts on “2.2 – Organization and Management”

1.
sanyagodha says:
February 5, 2022 at 9:18 am
i have my exam after a day and I’m preparing from these notes, they’re so

brief and helpful. Perfect for last-minute revision! thanks a lott ur a lifesaver:))))

2. REPLY
Vedant says:
March 8, 2021 at 8:02 pm
this was so helpful

i got 95/100 in business by just studying these notes

REPLY
1.
Lintha says:
March 9, 2021 at 2:19 pm
OMGG THIS IS AMAZING!! So glad to hear it!

3. REPLY
ahmed says:
November 20, 2020 at 10:38 am
this site has been really helpful for my igcse business course.can you tell me any site for computer
science just like this?

REPLY
1.
Sarah says:
November 22, 2020 at 10:25 am
We’re so glad the notes have been helpful!!

In reply to your question, none of us on the team have any experience with IGCSE computer
science, so we can’t recommend anything.