Chapter 7- Organisation 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
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, for 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.