Key elements of organisational structure

1. Key elements of organisational structure Textbook pages 135-137

2. Key terms • Level of hierarchy: layers of management and supervision in an organisation • Chain of command: lines of authority in an organisation • Lines of communication: how information is passed around an organisation • Span of control: number of subordinates one manager/supervisor is responsible for

3. Levels of hierarchy • The number of layers in the structure • Many layers suggests a need for close supervision

4. Significance of Levels/layers • Few layers suggests that employees are given authority to make decisions • Organisations with traditional cultures tend to have many levels in the hierarchy. Each manager/supervisor has limited responsibility • Small, dynamic businesses tend to have fewer • Layers and managers/supervisors have more responsibility

5. Span of control • Wide span = directly responsible for many employees/subordinates • Gives employees chance for more authority to make decisions • Narrow span = directly responsible for a small number of employees/subordinates • Gives employees less opportunity for decision-making.

6. Your Task • Read the case study “Who’s in charge?” and answer the questions

7. Delegation Key Term: Delegation: passing of authority to make decisions to employees further down the organisational structure

8. Significance of delegation As a business grows, the entrepreneur needs to delegate authority to other people in the organisation because they will not have enough time to do everything. This process of delegation is very difficult and potentially dangerous (Sausage Wars) and should be monitored closely in the early stages.

9. Your Homework Read through the cast study : Pigott Pastries and answer the questions