Organisational Structures (Edexcel GCSE Business)
Revision Note
Written by: Steve Vorster
Reviewed by: Jenna Quinn
Understanding Organisational Structure Terminology
An organisational structure outlines the reporting relationships, roles, and responsibilities of employees in the organisation
Businesses must determine what the best structure is for them so as to effectively implement their ideas and achieve their objectives
They should consider how the structure may affect the management and effectiveness of operations and communications
A well-designed organisational structure helps to promote clarity, efficiency, and accountability
Key terminology used in organisational design
Hierarchy
A hierarchy refers to the levels of authority within an organization
It describes the ranking of positions from top to bottom
The higher the position in the hierarchy, the more authority and power it holds
The hierarchy usually includes top-level management, middle-level management, and lower-level employees
Chain of command
The chain of command is the formal line of authority that flows downward from the top management to lower-level employees
It defines who reports to whom and who is responsible for making decisions
The chain of command helps to establish a clear communication channel and helps to maintain accountability within the organization
Span of control
Span of control refers to the number of employees that a manager or supervisor can effectively manage
It is based on the principle that a manager can only effectively manage a limited number of employees
A narrower span of control means that there are more layers of management
A wider span of control means that there are fewer layers of management
Centralised and decentralised structures
In a centralised structure, decision-making authority is concentrated at the top of the organization with senior management making most of the decisions
In a decentralised structure, decision-making authority is distributed throughout the organization, with lower-level employees having more decision-making power
Decentralisation can promote flexibility and innovation, while centralisation can promote consistency and control
Different Types of Organisational Structure
Businesses typically structure their organisation in one of two ways
Hierarchical (tall) organisational structures
Flat organisational structures
Different Structures & the Impact they have on Business Efficiency & Motivation
Tall Organisational Structure | Flat Organisational Structure |
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Advantages | Advantages |
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Disadvantages | Disadvantages |
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The Importance of Effective Communication
Effective communication between a business and its stakeholders is vital
It helps managers and employees to minimise mistakes
It supports everyone involved in a business to understand their role and what is expected of them
It ensures that the businesses values and objectives are clear
It provides customers with the information they need to understand goods and services
Managers should make sure that communication is controlled and organised to ensure that a suitable level of communication exists between key stakeholders
Effective communications need to be
accurate
clear and easily understood
complete
appropriate for the intended audience
via the right medium
provide a chance for feedback
The implications of over or under-communication in business
Barriers to Effective Communication
Communication may not be effective for a range of reasons
Written communication can be affected by poor spelling and grammar, illegible handwriting or unclear presentation
Verbal communication can be affected by language difficulties, the speed of speaking, or strong accents
The use of jargon can also be a barrier
Jargon refers to technical language or acronyms that may not be understood by a non-expert
Different Ways of Working
Technological developments and flexible working arrangements mean that businesses now have several options for organising the way workers are employed
The range of ways of working
Full-time employees usually work for more than 35 hours per week whilst part-time employees work fewer hours but are entitled to the same benefits such as paid holidays
Flexible employees may be full-time or part-time and have some choice over when they complete their hours of work
Shift working involves working set hours outside of the normal nine-to-five pattern and usually on a rotation basis
E.g. working during the night for one week followed by a week of working during daytime hours, with time off between the types of shift
A permanent contract means that a worker is employed until such a point that they want to leave or they are made redundant whereas temporary contracts last for a specified period of time (e.g. seasonal retail staff may be employed for the months leading up to Christmas)
Fixed term contracts guarantee a certain amount of hours of work for workers for a specific period of time
Zero hours contracts do not guarantee hours of work to employees but workers are expected to be available should they be needed
A freelance worker is a self-employed contractor who works for a variety of businesses on a job-by-job basis
The Impact of Technology on Ways of Working
Advances in technology have made remote working a popular option for many businesses
Employees can work from home and enjoy greater flexibility and a better work-life balance
Benefits of Remote Working for Businesses and Employees
Benefits for Businesses | Benefits for Employees |
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Technology has meant that communication with all stakeholders can take place quickly and be very cost effective
Email and messaging software allows messages to be sent and received instantly at little cost
Online meeting software such as Skype or Zoom allows for face-to-face communication without the need for travel
Processes such as recruitment can be speeded up as documents can be transferred and signed electronically
Mobile devices such as laptops and tablets can be used anywhere allowing employees to remain productive outside of their normal workplace
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