Section 4: People in business, organisational Structure

Organisational Structure is a way a business decides to carry out its activities.

Key Elements in Organisational Structures

• Workloads and Job Allocation : Who is going to do which job and what they are expected to do in working day, this can make a business more effective and cost-efficient.
• Levels of Hierarchy : Refers to the number of layers of authority within an organisation. Large number of layers 'tall'  and a 'Narrow Span Of Control' . A 'flat'organisational structure few layers of hierarchy and a 'wide span of control'
• Spans of Control :  Narrow span of control allows managers and supervisors to keep close control over employees for whom they are responsible for. A wide span of control, gives greater independence to employees because it is impossible for a manager or supervisor to monitor closely the work of a large number of individuals.

Key Elements in Organisational Structures

• Delegation :  The passing down of authority. Giving  more authority leading to wider span of control which can work effectively if junior employees have been delegated authority to take decisions.
• Communication Flows :  Communication id the exchange of information between two or more parties. Communication Flows, up /down and across the organisation. Up and Down, passing of information down from senior to junior employees and from junior to senior employees. Across, employees at the same level.
• Centralisation and Decentralisation : Centralised is where most of decision are made at the top by managers. Decentralised is where greater authority given to employees lower down the organisational structure.

How Organisational structures affects business performance.

An entrepreneur when first designing an organisational structure will be to:

• Keep a tight control on costs and meet customers needs.

Keeping control of Costs