Organisation Structure – Organisation structure refers to how responsibility and authority is

shared in a business organisation.

This is often displayed in the form of an organisational chart. The 2 common type of charts are

● Tall organisational charts – These have a long chain of command and a small span of
control
● Flat organisational charts – Short chain of command, wide span of control

Advantages of an organisational chart

● Shows how everybody is linked together in a business

● Lines of communication are clear
● Motivational as employees can see where they belong and can plan their career paths

Key Definitions:

Chain of Command – is how the power and authority is passed down from the top of the
organisation (managers) to lower employees

Span of Control – The number of employees working directly under a manager.

Levels of Hierarchy – Number of layers in an organisation structure

Delayering – removing an entire row of management

There are 3 main leadership styles – Autocratic, democratic and laissez-faire

Autocratic – Leader is in charge and gives orders to employees

● Makes decision alone

● Everything depends on the leader
● May de-motivate employees
● May be an advantage for some businesses where decision needs to be made quickly

Democratic – Other employees involved in decision making

● Communication between managers and employees

● Future plans are discussed with other employees
● Motivates employees because they are involved in making decisions.
● Sharing of ideas within the business.
● Can delay decision making

Laissez-Faire – “let it be” Leader sets objectives and employees make decisions and organise
their own work.

● Can be useful when creative ideas are needed

● Highly motivational for employees as they control their own working life
● Poor coordination and decision making
● Relies on good team work

Leadership style may be dependent on various factors. e.g.

● Type of business (creative or supply driven)

● Nature of task (requires cooperation?)
Advantages of short chain of command

● Faster communication – Communication is quicker and more accurate since it is passed

on by fewer people.
● Stronger relationship between high-level managers and employees – This is because
there are fewer levels between managers and employees.
● Each manager is responsible for more employees – This encourages them to delegate
(pass down) more work to employees.

1. Planning
● Set goals for the future of the organisation.
● Give the business a sense of direction and purpose (e.g. we will aim to increase sales by
10% by next year.)

2. Organising
● Organising of people and resources so that the business operates efficiently (Managers
can’t do everything, they must delegate tasks to other employees)

3. Coordinating
● Making sure all departments are working together to achieve the overall objectives and
plans of the organisation. (e.g. Manager makes sure marketing and operations
department work together to plan for a new product launch)

4. Commanding
● Guiding, leading and supervising employees in the organisation. (Managers need to
make sure that employees are doing their work!)

5. Controlling
● This involves monitoring performance to ensure that objectives will be met.
Delegation – Passing down authority and responsibility to a subordinate (employee)

Advantages of delegation

● More time for manager to do other tasks

● More interesting and rewarding work for employee (motivational)
● Employee feels trusted (motivational)
● Trains employees to do important tasks.

What is a trade union?

Trade union – Group of workers who have joined together to ensure their interest are protected.

Why join a trade union?

● Improved conditions of employment

● Improved work environment
● Improved benefits
● Improved job satisfaction
● Advice/financial support
● Strength in numbers (many employees will join)

Disadvantages

● Cost money to be a member

● May be forced to take action e.g. strike even if you don’t agree