2.51 Organisational Structures

An organisational structure is the way that employees and their job roles are organised in a business.

A structure is important because:

  • it’s easier to see who does what in the business
  • communication becomes easier
  • everyone knows their role and responsibilities

There are some keywords you need to know about for this topic:

  1. Chain of command – the flow of information, power and authority through a business
  2. Span of control – the number of subordinates an employee can delegate to
  3. Delegation – where one person gives a task to a subordinate
  4. Subordinate – someone a manager can delegate tasks to

Some organisations use a hierarchical structure. The diagram for this looks like this:

hierarchical

Advantages of a hierarchical structure:

  • opportunities for promotion
  • small span of control so managers know subordinates well and can give tasks to the best person

Disadvantages of a hierarchical structure:

  • slow communication
  • not very flexible because of the number of layers
  • lots of managers so it can be expensive

Some organisations use a flat structure. The diagram for this looks like this:

flat

Advantages of a flat structure:

  • fast communication
  • employees have more responsibility and so may feel more motivated

Disadvantages of a flat structure:

  • staff can get overstretched
  • span of control might be too big for managers to control