Organisational Structures

The structure of an organisation is

influenced by the needs of the
stakeholders and the objectives of the
organisation
An organisational chart shows the main
parts of the organisation , the relationship
between the different parts and who
reports to whom
Handout – Furniture manufacturing
company hierarchy

Question: What does this show as to who is

important or what is important?

Any organisational chart should give a clear

picture of what the relevant sections of the
organisation are and who reports to whom
 Organisation Charts
Hierarchical Structure

Managing Director

Marketing
Sales Director Finance Director
Director

A B C D Market Strategy Purchasing Sales Accounts

Research Manager Manager Manager
Organisational Structures Show:

Division of Work
Who is responsible. For example
 customer complaints
 payment of wages
 the IT systems
Organisational Structures Show:

Span of Control
The number of people that individuals are
responsible for:

 Too many: manager becomes

overworked
 Too few: time is wasted
Organisational Structures Show:

Levels of Hierarchy
This relates to the number of levels. If
too many there can be problems with
communication and those on lower
levels tend to have little responsibility

Handout – Tomato Ketchup

Organisational Structures Show:

Division of Work
This could be by:
 Function (i.e. specialisms)
 Geography (by different regions)
 Product (e.g. as in supermarkets)
 Type of customers (e.g. in a bank)
 Example: Tesco's Organisational Chart – based on store structure
Store Director How big is this
Manager’s Span?

Regional Manager 8
Store Manager

Stock Controller Customer Service

Personnel Manager Ambient Manager Fresh Manager Non Food Manager Training Manager Security Manager
Manager Manager

Admin/personnel Counters Manager

Ambient Team Clothing Team Stock Control Security Assistants Customer Service
Assistants (Deli, Curry Pot,
Leader Leader Assistants Assistants
Pizza)

Team Electrical Team

Support Office Bakery Team Leader CS Desk
assistants Leader

How many levels How big is this Manager’s

Restaurant Team Span?
of hierarchy are Non Food Assistants

6 3
Leader
there?

Fresh Assistants
What are your views of the Tesco structure?
What is an Ambient Manager’s role?
Matrix Structure
This type of structure combines the traditional departments
seen in functional structures with project teams.

For example, a project or task team established to develop a

new product might include engineers and design specialists as
well as those with marketing, financial, personnel and
production skills.

These teams can be temporary or permanent

Depending on the tasks they are asked to complete.

Each team member can end up with two line managers –

their normal departmental manager as well as the manager
of the project.
Matrix Structure

Advantages
• Can help to break down traditional department barriers,
improving communication across the entire organisation
• Can allow individuals to use particular skills within a
variety of contexts

Disadvantages
• Members of project teams may have divided loyalties as
they report to two line managers
• There may not be a clear line of accountability for project
teams given the complex nature of matrix structures
Handout:
Luton Sixth Form College Structure
(discuss)