Revision Notes: Unit 2
Chapter 13: Organisational Structure
Meaning: The internal, formal framework of a business that shows the way
in which management is organized and how authority and accountability are
passed through the organization.
1. Types of Structure
Functional Structure: Organized by departments like Marketing,
Finance, and R&D.
o Advantages: 1) Promotes high-level specialization and
expertise. 2) Encourages departmental loyalty.
o Disadvantages: 1) Vertical "silos" make inter-departmental
coordination difficult. 2) Junior staff feel remote from senior
management.
o Evaluation: Best for stable businesses with routine tasks, but
lacks the flexibility needed for rapid market changes.
Matrix Structure: Project teams of specialists from different
departments.
o Advantages: 1) Breaks down departmental barriers. 2)
Crossover of ideas leads to innovative solutions.
o Disadvantages: 1) Dual authority (two bosses) can cause
conflict. 2) High management time spent on coordination.
o Evaluation: Essential for dynamic, project-based industries like
IT or advertising.
2. Key Structural Concepts
Chain of Command: The route taken by instructions passed down the
hierarchy.
Span of Control: The number of subordinates reporting directly to a
manager.
Line vs. Staff Authority: * Line Managers: Have direct authority
over subordinates.
o Staff Managers: Specialists (e.g., HR) who provide support but
have no direct authority over line workers.
3. Delegation, Authority, and Accountability
Delegation: Passing authority (power) down to a subordinate to
perform a task.
Responsibility: The manager delegates authority, but cannot
delegate ultimate responsibility for the outcome.
Evaluation: Successful delegation requires a balance of Trust vs.
Control. If the manager interferes too much, the motivational benefits
are lost.
Chapter 14: Business Communication
Meaning: The exchange of information so that the message is received,
understood, and feedback is provided.
1. Communication Methods
Oral (Spoken): Meetings, video calls, or face-to-face.
o Advantages: 1) Instant feedback. 2) Body language reinforces
the message.
o Disadvantages: 1) No permanent record. 2) Subject to "noise"
or physical barriers.
Electronic (IT-based): Email, Intranets, and shared databases.
o Advantages: 1) High speed over long distances. 2) Information
can be easily stored and retrieved.
o Disadvantages: 1) "Information Overload" causes stress. 2)
Security risks like hacking.
2. Barriers to Communication
Meaning: Factors that prevent the message from being understood,
such as jargon, technical noise, or too many levels in the hierarchy.
Evaluation: Effective communication is the link between business
efficiency and employee motivation.
Chapter 15: Leadership
Meaning: Influencing and inspiring others to achieve a common vision or
objective.
1. Key Leadership Theories
Trait Theory: Leaders are born with certain characteristics like
charisma and integrity.
Behavioural Theory: Leadership is a learned skill focused on
technical, human, and conceptual abilities.
Contingency Theory: There is no "best" style; leaders must adapt
based on the situation and the maturity of their subordinates.
2. Emotional Intelligence (EI)
Meaning: The ability to understand and manage your own and others'
emotions (Goleman).
Four Competencies: 1) Self-awareness, 2) Self-management, 3)
Social awareness, 4) Social skills.
Evaluation: High EI is critical for senior leaders to build trust and
navigate complex workplace relationships.
Chapter 16: HRM Strategy
Meaning: The long-term plan for managing an organization's people to align
with overall business objectives.
1. Hard vs. Soft HRM
Hard HRM: Treats employees as a resource/cost to be used efficiently.
o Impact: Lower short-term labor costs but higher staff turnover
and poor morale.
Soft HRM: Treats employees as a valuable asset to be nurtured and
developed.
o Impact: Higher training costs but better customer service and
long-term competitive advantage.
2. Management by Objectives (MBO)
Meaning: A system where managers and employees agree on
specific, measurable goals.
o Advantages: 1) Aligns individual effort with company vision. 2)
Provides a clear basis for performance appraisals.
o Disadvantages: 1) Can become a bureaucratic "paperwork"
exercise. 2) Focus on numbers may hurt quality.
3. The Role of IT and AI in HRM
Meaning: Using advanced software for recruitment tracking, e-
learning, and data-driven workforce planning.
Evaluation: These tools improve efficiency but must be balanced with
human interaction to maintain employee morale and welfare.