management structure and organisation
TRANSCRIPT
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Management Structure and
Organisation
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Content
Management structure and design
Organisational design
Tall Flat
Matrix
Entrepreneurial
Management by objectives
Centralisation and decentralisation
Delegation and consultation
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Why Have a Structure?
A clear structure makes it easier to see which
part of the business does what
An organisational structure is the way in whicha business is arranged to carry out its activities
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Management Structure and Design
The choice of structure impacts the
organisations culture their ethos and beliefs
If businesses are looking to change theirdirection they often look at restructuring
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Organisational structure
Includes:
The routes through which communication pass through the
business
Who has authority and power and responsibility within thebusiness
The roles and titles of people within the business
The people whom individual employees are accountable for
and those for whom they are responsible
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Key terms
Hierarchy the number of layers of levels within
an organisation
Subordinate a worker Span of control the number of subordinates
who directly report into a manager
Ch
ain of command th
e line of communicationand authority from the top to the bottom of the
hierarchy
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Flat or Tall Structure?
A Flat structure has few layers in the hierarchy,
a wide bottom and a gentle slope to the top
Lots of small companies have a flat structure
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Flat Structures Advantages and
Disadvantages Traditionally an American structure
Span of control is wider
Less hierarchy easier to make decisions More employee empowerment
Can be cheaper as donthave to pay expensive
management salaries
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Tall structures
A tall structure has many layers in the hierarchy
As t here are many layers the chain of command
is longer Managers have smaller spans of control and
there is less delegation
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Tall structures Advantages and
Disadvantages Traditional structure of European companies
Clearhierarchy
Smaller span of management Longer chain of command
More control
Clear communication
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Tall to flat
In t he 1990s many people felt that traditional tall
structures were not cost effective so delayering
occurred Delayering is the process of removing layers ion
the hierarchy
Businesses saw delayering as a way of cutting
costs and increasing efficiency
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Matrix structure
Matrix t his is where the business is organised by task
Combines a vertical chain of command with project /product teams
The focus is on the task Is a more flexible structure and allows the business to
be more responsive to customer needs
However it can cause conflict and employees mayhave
divided responsibilities Extra costs may be generated by duplication of support
staff
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Entrepreneurial Structure
Often found where businesses operate incompetitive markets and especially where rapiddecisions are needed
Have a few core workers at the centre of theorganisation and peripheral workerssurrounding them
Depends onh
ow good th
e core workers are atmanaging and making decisions
Can be difficult for larger organisations
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Additional ways to structure 2
By function
By product / activity
By area By customer
By process
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Management By Objectives
Druckers theory of management:
Identified that managers should:
Identify and agree targets for achievement withemployees
Agree on the level of support needed to achieve the
targets
Evaluate how well the objectives were met
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Management By Objectives
Need to agree objectives for each worker
This can increase communication
Can increase motivation as subordinates knowwhat they need to achieve
Can help to identify training needs
If workers meet goals can allow them to achieveself actualisation needs (Maslow)
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Management By Objectives
It can also cause problems
Some workers may be threatened by the target
setting experience managers can set targetswhich can be perceived as unachievable
Needs commitment from everyone in the
organisation
Objectives may become outdated due to
changes in the business environment
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Centralisation and Decentralisation
Centralised organisations are where most
decisions are taken by senior managers at the
top of the hierarchy.
This leads to rapid decisions but low levels of
consultation
Decentralised businesses gives more authority
to workers lower down the hierarchy by
delegating decisions
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Delegation
Delegation is where managers give a portion of
their work to their subordinates
Delegation can allow subordinates to gain moreautonomy and become empowered leading to
an increase in performance
This is a technique used by democratic
managers
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Consultation
This is where managers ask for and take into
account subordinates views
Consultation allows a manager to keep morecontrol of the situation
This is a technique used by paternalistic
managers
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Summary
Organisational design describes how a business is organised
Tall or traditional structures have many levels in the hierarchy
Flat structures have few levels in the hierarchy
Matrix structures are organised by product / project
Entrepreneurial structures have core workers at the centre and peripheralworkers at the edges
Management by objectives is the idea that you set targets for all workers toincrease performance
Centralised organisations are where senior managers make key decisions
Decentralised organisations are where workers have more authority to makedecisions
Delegation is where managers give employees some of their work increasingtheir responsibility
Consultation where managers ask employees their opinions