unit 2- business organizations
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Unit 2- Business Organizations. Chapter 10 – Organizational Structure. You will learn…………. Why businesses need an internal structure How structure changes when businesses expand How organizational charts describe internal structures of an organization Ideas of Hierarchical Structure - PowerPoint PPT PresentationTRANSCRIPT
Unit 2- Business Organizations
Chapter 10 – Organizational Structure
Why businesses need an internal structure How structure changes when businesses
expand How organizational charts describe internal
structures of an organization Ideas of
◦ Hierarchical Structure◦ Chain of Command◦ Span of Control◦ Line and Staff Managers◦ Delegation
You will learn………….
Business that are ◦ Centralized ◦ Decentralized
Different forms of decentralization
You will learn………….
It refers to the ◦ Levels of management◦ Division of responsibilities
…… within an organization
Shown on an Organizational Chart
What is an Organizational Structure?
Organizational Chart
Cosy Corner Convenience Store
Main Tasks
Working Conditions
Job Description – Shop Assistant
Giving a subordinate the authority to perform tasks
NOT THE FINAL RESPONSIBILITY
Delegation
Authority to arrange the shelves in the store.
Authority to order the stock.
Delegation
Delegation must mean:
A reduction in direct control by supervisors & managers once the tasks are done by workers.
Increased trust in workers by supervisors & managers.
Delegation Authority to arrange the shelves in the store.
DelegationAdvantages
Managers ◦ look after more
important jobs◦ make less mistakes◦ measure success of
staff more easily
Authority to arrange the shelves in the store.
DelegationAdvantages
Subordinate◦ work more
interesting & rewarding
◦ feel more important◦ training for progress◦ career opportunities
Authority to arrange the shelves in the store.
Delegation Authority to arrange the shelves in the store.
Risk of Failure
Task completed better
Complete Control
Cosy Corner Convenience Store
Chief Executive (Bill Murray)
Marketing Director
Store Manager
Assistant Store
managers
Shop Workers
Purchase Manager
Financial Director
Book-keeping
Human Resource Director
Administration Assistant
Cosy Corner Convenience Stores
Organizational Chart
Hierarchy
Departments
Chain of Command
Organizational Chart Features
Chief Executive (Bill Murray)
Marketing Director
Store Manager
Assistant Store
managers
Shop Workers
Purchase Manager
Financial Director
Book-keeping
Human Resource Director
Administration
Assistant
Linkages
Communication channels
Position in organization
Taking orders
Accountability
Sense of belonging
Organizational Chart AdvantagesChief Executive (Bill Murray)
Marketing Director
Store Manager
Assistant Store
managers
Shop Workers
Purchase Manager
Financial Director
Book-keeping
Human Resource Director
Administration
Assistant
Structure of the organization which allows instructions to be passed down from senior management to the lower levels
Chain of CommandChief Executive (Bill Murray)
Marketing Director
Store Manager
Assistant Store
managers
Shop Workers
Purchase Manager
Financial Director
Book-keeping
Human Resource Director
Administration Assistant
Long Chain of Command
Short Chain of Command
The number of subordinates working directly under a manager
Span of ControlChief Executive (Bill Murray)
Marketing Director
Store Manager
Assistant Store
managers
Shop Workers
Purchase Manager
Financial Director
Book-keeping
Human Resource Director
Administration Assistant
Wide Span of Control
Narrow Span of Control
Chain of Command & Span of Control
Longer Chain of CommandTaller Organizational
StructureNarrower Span of Control
Shorter Chain of CommandShorter Organizational
StructureWider Span of Control
Chain of Command & Span of Control
Longer Chain of CommandTaller Organizational
StructureNarrower Span of Control
FeaturesSupervisor/Manager responsible for low amount of subordinates Less delegation More control over subordinates less watchfulness for the subordinates
Chain of Command & Span of Control
Longer Chain of CommandTaller Organizational
StructureNarrower Span of Control
FeaturesCommunication
Slower & less accuratemessage through
many levels Workers less trustedMake less decisionsLess job satisfaction Less room for mistakes
Chain of Command & Span of ControlFeaturesSupervisor/Manager responsible for many subordinatesMore delegationLess direct control of subordinatesLeads to job enrichment
Shorter Chain of CommandShorter Organizational
StructureWider Span of Control
Chain of Command & Span of ControlFeatures Communication
quicker & more accurate
message through fewer levels
Workers more trustedMake more decisionsMore job satisfaction More room for mistakes
Shorter Chain of CommandShorter Organizational
StructureWider Span of Control
Chief Executive
Production Director
Food and Process Factory
Managers
Factory Worker
s
Financial Director
Financial Accounta
nt
Book-keeper
Purchasing Director
Specialist
Product Buyers
Marketing Director
Human Resource Director
Administration
Officer
STAFF MANAGERS• Specialists in their area• Offer advice & support• Report to Board of Directors (BOD)• Very qualified experts
Chief Executive
Production Director
Food and Process Factory
Managers
Factory Worker
s
Financial Director
Financial Accounta
nt
Book-keeper
Purchasing Director
Specialist
Product Buyers
Marketing Director
Human Resource Director
Administration
Officer
FUNCTIONAL DEPARTMENTS• One important responsibility• Specialist skills• Often efficient
•Loyal to their department (maybe not to the whole company)• MANAGERS in these departments are called LINE MANAGERS
Chief Executive
Production Director
Food and Process Factory
Managers
Factory Worker
s
Financial Director
Financial Accounta
nt
Book-keeper
Purchasing Director
Specialist
Product Buyers
Marketing Director
Human Resource Director
Administration
Officer
REGIONAL DIVISIONS• Look after stores in other countries• Specialist knowledge of the local market• Popular products in given country• Legalities
Chief Executive
Production Director
Food and Process Factory
Managers
Factory Worker
s
Financial Director
Financial Accounta
nt
Book-keeper
Purchasing Director
Specialist
Product Buyers
Marketing Director
Human Resource Director
Administration
Officer
STAFF MANAGERS• Specialists in their area• Offer advice & support• Report to Board of Directors (BOD)• Very qualified experts
FUNCTIONAL DEPARTMENTS• One important responsibility• Specialist skills• Often efficient
•Loyal to their department (maybe not to the whole company)• MANAGERS in these departments are called LINE MANAGERS
REGIONAL DIVISIONS• Look after stores in other countries• Specialist knowledge of the local market• Popular products in given country• Legalities
Chief Executive
Production Director
Food and Process Factory
Managers
Factory Workers
Financial Director
Financial Accountant
Book-keeper
Purchasing Director
Specialist Product Buyers
Marketing Director
Human Resource Director
Administration Officer
Advantages of employing bothStaff Managers & Line Managers
STAFF MANAGERS
FUNCTIONAL DEPARTMENTSLINE MANAGERS
Staff Managers provide advice to line managers on particular issues
Line managers have opportunity to concentrate on their main tasks
REGIONAL DIVISIONS
Chief Executive
Production Director
Food and Process Factory
Managers
Factory Workers
Financial Director
Financial Accountant
Book-keeper
Purchasing Director
Specialist Product Buyers
Marketing Director
Human Resource Director
Administration Officer
Disadvantages of employing bothStaff Managers & Line Managers
STAFF MANAGERS
FUNCTIONAL DEPARTMENTSLINE MANAGERS
Conflict & frustration between the two groups Different points of view on matters
Line employees confused about who to take orders / instructions from
Centralized◦ Most decisions by
the center Higher levels of
management
Decentralized◦ Many decisions
delegated to lower levels of management
Management Systems
Important Issues Investment Projects worth
a large sum of money Taking over of other
businesses Overall aims and
objectives of the business Firm’s Growth Strategy Environmental Objectives
Centralized Decisions
Decisions made by those that are “close to the action”
Delegation makes lower level management◦ Feel more trusted◦ More Job Satisfaction
Quicker Decision Making
Decentralized Management System Advantages
Functional Decentralization
Company
Marketing
Production
Finance
Human Resources
Federal DecentralizationVehicle Manufacturing
Cars
Pick-ups
Vans
Trucks
Regional DecentralizationMultinational Company
Asia
USA
Middle East
Europe
Project Teams Decentralization
Aircraft Design
First Class
Business Class
Premium Economy
Economy
Draw & explain the significance of a simple organizational chart
Understand the changes that occurs to a business when the business expands
Know the difference between ◦ Span of Control◦ Levels of Hierarchy◦ Line and Staff Managers
Understand the importance of delegation Analyze the difference between a
centralized and decentralized Organization
Are you able to…………
Explain the different forms of decentralization
Are you able to…………