Unit 7: Organization and Management

 Organizational Structure
Organizational structure refers to the levels of management and division of responsibilities
within a business.
In many organization, organizational structure is often represented in the form of an
organizational charts as shown below

Advantages of an organizational chart:

 All employees are aware of which communication channel is used to reach them with
messages
 Everyone knows their position in the business. They know who they are accountable
to and who they are accountable for
 It shows the links and relationship between the different departments
 Gives everyone a sense of belonging as they appear on the organizational chart

Features of an organizational chart

I. Hierarchy
It is the different level found in an organization. Each hierarchy has a different degree of
authority, power and responsibility.
II. Span of control
It is the number of subordinates working directly under a manager in the organizational
structure. In the above figure, the managing director’s span of control is four. The marketing
director’s span of control is the number of marketing managers working under him.
III. The chain of command
It is the structure of an organization that allows instructions to be passed on from senior
managers to lower levels of management. In the above figure, there is a short chain of
command since there are only four levels of management shown.

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Advantages of a short chain of command
 Communication is quicker and more accurate
 Top managers are less remote from lower employees, so employees will be more
motivated and top managers can always stay in touch with the employees
 Spans of control will be wider, this means managers have more people to control this
is beneficial because it will encourage them to delegate responsibility (give work to
subordinates) and so the subordinates will be more motivated and feel trusted.
However there is the risk that managers may lose control over the tasks.
Note: these are also the disadvantages of a long chain of command

Disadvantages of short chain of command

 The manager can lose control of the subordinate
 There can be conflict among the subordinate
 If the subordinate are poorly train, they can make many mistake

Line Managers have authority over people directly below them in the organizational
structure. Traditional marketing/operations/sales managers are good examples.
Staff Managers are specialists who provide support, information and assistance to line
managers. The IT department manager in most organizations act as staff managers.

 Delegation
Delegation is giving a subordinate the authority to perform some tasks. It is important to
remember that it is the authority to perform a task which is being delegated and not the final
responsibility.
Advantages to managers:
 Managers cannot do all work by themselves
 Managers can measure the efficiency and effectiveness of their subordinates’ work
 Managers are less likely to make mistakes as some of the task are being perform by
the subordinate
 Managers can delegate simple task and have more time to concentrate on important
tasks.
Advantages to subordinates:
 The work becomes more interesting and rewarding- increased job satisfaction
 Employees feel more important and feel trusted– increasing loyalty to firm
 Can act as a method of training and opportunities for promotions, if they do a good
job.
 It gives the subordinate career opportunities

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Why some managers are reluctant to delegate:
 They are afraid that the subordinates might fall and they will be held responsible
 Some managers want to control everything by themselves
 Some managers may feel insecure as there is the risk that the subordinate might
perform better than them

 Role of Management
All organizations have managers and they have to fulfill the following functions:
1. Planning
Setting aims and targets for the organizations/department to achieve. It will give the
department and its employees a clear sense of purpose and direction. Managers should also
plan for resources required to achieve these targets – the number of people required, the
finance needed etc.
2. Organizing
Managers should then organize the resources. This will include allocating responsibilities to
employees, possibly delegating.
3. Coordinating
Managers should ensure that each department is coordinating with one another to achieve the
organization’s aims. This will involve effective communication between departments and
managers and decision making. For example, the sales department will need to tell the
operations dept. how much they should produce in order to reach the target sales level. The
operations dept. will in turn tell the finance dept. how much money they need for production
of those goods. They need to come together regularly and make decisions that will help
achieve each department’s aims as well as the organizations.
4. Commanding
Managers need to guide, lead and supervise their employees in the tasks they do and make
sure they are keeping to their deadlines and achieving targets.
5. Controlling
Managers must try to assess and evaluate the performance of each of their employees. If
some employees fail to achieve their target, the manager must see why it has occurred and
what he can do to correct it- maybe some training will be required or better equipment.

Why is it important to have good managers?

 To motivate employees
 To give guidance and advice to employees they manage
 To increase profitability of the business
 To control the business

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  Leadership Styles
Leaderships styles refer to the different approaches used when dealing with people when in
a position of authority. A good leader is someone who can inspire and get the best out of the
workforce. There are mainly three styles:
i. the autocratic
ii. democratic
iii. laissez-faire styles.

 Autocratic style
It is where the managers expects to be in charge of the business and have their orders
followed. They do all the decision-making, not involving employees at all. Communication
is thus, mainly one way- from top to bottom. This is standard in police and armed forces
organizations.
 Democratic style
It is where managers involve employees in the decision-making and communication is two-
way from top to bottom as well as bottom to top. Information about future plans is openly
communicated and discussed with employees and a final decision is made by the manager.
 Laissez-faire (French phrase for ‘leave to do’ ) style
It makes the broad objectives of the business known to employees and leaves them to do their
own decision-making and organize tasks. Communication is rather difficult since a clear
direction is not given. The manger has a very limited role to play.

Different business situation often require different leadership styles to be use. For example:
a manager can use a democratic style to encourage workers to participate in decision making.
However, during a crisis or when worker misbehave manager can use an autocratic style.

 Trade Unions
A trade union is a group of workers who have joined together to ensure their interest are
protected. They negotiate with the employer (firm) for better conditions and treatment and
can threaten to take industrial action if their requests are denied.
Industrial action can include:
 overtime ban (refusing to work overtime)
 go slow (working at the slowest speed as is required by the employment contract)
 strike (refusing to work at all and protesting instead)
Trade unions can also seek to put forward their views to the media and influence government
decisions relating to employment and also improve communication between management
and employees.

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Benefits to workers of joining a trade union:
 strength in number- a sense of belonging and unity
 improved conditions of employment, for example, better pay, holidays, hours of work
 improved working conditions, for example, health and safety
 improved benefits for workers who are not working, because they’re sick, retired or
made redundant (dismissed not because of any fault of their own)
 financial support if a member thinks he/she has been unfairly dismissed or treated
 benefits that have been negotiated for union member such as discounts on firm’s
products, provision of health services.
Disadvantages to workers of joining a trade unions:
 costs money to be member- a membership fee will be required
 may be asked to take industrial action even if they don’t agree with the union- they
may not get paid during a strike, for example.