iGCSE Business Studies2.2.1 Organisation Charts

Learning Outcomes

• Draw, Interpret and understand simple organisational charts

• Understand the features of simple hierarchical structures:– Span of control– Hierarchy– Chain of command

• Roles, Responsibilities and inter-relationships between people in organisations

Organisational Structure

• Refers to the ways that businesses organise their human resources (employees)

• As businesses grow there is a growing need for the structure to be formalised

What is meant by a Hierarchy?

Central Question

What is the best way to

structure your business?

Formal Versus Informal Structures

What do you think these terms mean…..

–Hierarchy–Chain of command–Span of control–Delegation–-Subordinate–Line Manager

CEO/MD

Board of Directors

Management

Supervisors

Other Employees (Operatives)

Senior management

Middle management

Junior management

Key Term: HierarchyPa

y an

d A

utho

rity

Key Term: Chain of Command

Chain of command: The way authority and power are passed down in the business - Who is responsible to whom?

Headteacher

Deputy Heads

Heads of Faculty

Heads of Department

Teaching Staff

*

Key Term: Span of Control

Span of control: The number of subordinates directly reporting to a superior

Tall hierarchyNarrow span of control

Tight supervision and control

Short hierarchyWide span of control

Freedom for subordinatesLower cost

Key Term: Organisation Chart

• Identify the span of control of: – the Managing Director– the Purchasing Manager

• Would you describe this as a wide or a narrow hierarchy?

Managing Director

Task – Based on this Pastoral chart, can you draw a curriculum

chart

Homework Task

• Describe the Organisation Structure of BSM. Make sure you use the words:

• Span of Control• Chain of Command

Task – Sinbad Plc

• Using the information from the sheet draw an organisational chart for Sinbad Plc

Key Term: DelegationRefers to passing authority & control on to

others. Manager retains responsibility, but the subordinate does the work.

What are the benefits of delegation?

Benefits of Delegation

Why might a manager be reluctant to delegate?

Key Terms: Centralisation and decentralisation

• Centralisation: Retaining control within the top levels of the hierarchy – at head office

• Decentralisation: Delegating authority down the hierarchyCentralisation

Retains tight control at the top of the organisation

Employees are not able to show flair and initiative

Decentralisation Motivates employees by

giving them more freedom and responsibility

Employees may not have the experience/training to carry out tasks effectively

Would you rather work in an organisation that was centralised or decentralised?