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, foe 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.

 

 

 

Notes submitted by Lintha

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2 thoughts on “2.2 – Organization and Management

  1. Amazing Website with great content. But I have a few things that I think it would be great if it was added
    1. Math notes
    2. ICT notes
    3. In the English notes if you add a sample answer for the questions it would be great
    Overall the website is wonderful

    Like

    1. At present, the IGCSE AID team are unfortunately unable to create and upload notes for Maths and ICT.
      However, if you need help with ICT, you should definitely check out this website: https://www.ictlounge.com/
      I also used the Math is Fun website to help me clear maths doubts – I understand their website can be a little difficult to navigate, so just google your area of doubt and add ‘Math is Fun’ at the end, e.g. probability math is fun.

      We will definitely take into account your third request, however!
      Thank you for your constructive criticism and good luck with your exams!

      Like

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