Principles of Management and Organisational Structures

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  • Principles of Management and Organisational Structures
    • De-layering
      • Removal of one or more layers from a hierarchy as organisations attempt to become LEANER
      • Can assist in improving communication (shorter)
      • Cuts bureaucracy and overhead costs and motivates staff by increasing individual authority and responsability
      • Potentially a management term for redundancies.
    • Levels of Hierarchy
      • The number of layers in a hierarchy will reflect the number of supervisory and managerial levels, ranks or grades.
      • Taller = greater opportunities for miscommunication or deliberately filtered communications.
    • Span of Control
      • The number of subordinates reporting to a manager.
      • Narrow = tight supervision, less discretion and therefore less chance of mistakes or poor productivity.
      • Wide = reduced supervision and leads to greater delegation and job enrichment. Used in businesses with an innovative culture.
    • Accountability and Responsability
      • A hierarchy and defined lines of authority lead to clear accountability and responsability.
      • Can be positive as personal accountability can lead to high motivation.
      • An atmosphere of mistrust accountability can be a threat and reduce morale.
    • Authority
      • Flows from position to position in the hierarchy and is a source of power.
      • Can be used to motivate
    • Chain of Command
      • Information is communicated up the hierarchy through the layers and orders are communicated down.
    • Managerial Functions
      • An activity which can be divided neatly into functions; production, marketing, sales, accounting and finance, human resources etc
      • MANAGER DIRECTORS must ensure that these functions are coordinated
    • Centralisation
      • Only the top levels of hierarchy have authority to make decisions.
      • Geographically spread organisations take orders from decisions made at head office.
      • Can simplify and speed up decision making
      • May not take into account local factors
    • Decentralisation
      • Implies widespread delegation and the passing of power down the hierarchy for decision making
      • Can lead to loss of control by senior managers and head office, lack of direction or consistency which in turn may impact the brand and marketing opportunity.
    • Bureaucracy
      • Where the work of the organisation closely follows rules and procedures.
      • Job descriptions will be narrow and fully defined
      • Individuals have very little descretion


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