2.

2 Organisation and management

 
2.2.1 – Draw, interpret and understand simple organisational charts

Definition of Organisation Structure

Organisation structure refers to how responsibility and authority is shared in a

business organisation. 

This is often displayed in the form of an organisational chart. The 2 common

type of charts are

 Tall organisational charts – These have a long chain of command and a small
span of control
 Flat organisational charts – Short chain of command, wide span of control

Advantages of an organisational chart 

 Shows how everybody is linked together in a business

 Lines of communication are clear
 Motivational as employees can see where they belong and can plan their career
paths

Chain of Command – is how the power and authority is passed down from the top
of the organisation (managers) to lower employees

Span of Control – The number of employees working directly under a manager.

Levels of Hierarchy – Number of layers in an organisation structure

 
Advantages of short chain of command

 Faster communication – Communication is quicker and more accurate since it is

passed on by fewer people.
 Stronger relationship between high-level managers and employees – This is
because there are fewer levels between managers and employees.
 Each manager is responsible for more employees – This encourages them to
delegate (pass down) more work to employees.

De-layering – removing an entire row of management

2.2.2 – The role of management

Roles of managers in a business.

1. Planning

 Set goals for the future of the organisation.

 Give the business a sense of direction and purpose (e.g. we will aim to
increase sales by 10% by next year.)

2. Organising

 Organising of people and resources so that the business operates

efficiently (Managers can’t do everything, they must delegate tasks to other
employees)

3. Coordinating

 Making sure all departments are working together to achieve the overall
objectives and plans of the organisation. (e.g. Manager makes sure marketing
and operations department work together to plan for a new product launch)

4. Commanding

 Guiding, leading and supervising of employees in the

organisation. (Managers need to make sure that employees are doing their
work!)

5. Controlling

 This involves monitoring performance to ensure that objectives will be met.

Delegation – Passing down authority and responsibility to a subordinate (employee)

Advantages of delegation

 More time for manager to do other tasks

 More interesting and rewarding work for employee (motivational)
 Employee feels trusted (motivational)
 Trains employee to do important tasks.

2.2.3 – Leadership styles

There are 3 main leadership styles – Autocratic, democratic and laissez-faire

Autocratic – Leader is in charge and gives orders to employees

 Makes decision alone

 Everything depends on the leader
 May de-motivate employees
 May be an advantage for some businesses where decision needs to be made
quickly

Democratic – Other employees involved in decision making

 Communication between managers and employees

 Future plans are discussed with other employees
 Motivates employees because they are involved in making decisions.
 Sharing of ideas within the business.
 Can delay decision making

Laissez-Faire – “let it be” Leader sets objectives and employees makes decision
and organise their own work.

 Can be useful when creative ideas are needed

 Highly motivational for employees as they control their own working life
 Poor coordination and decision making
 Relies on good team work
Leadership style may be dependent on various factors. e.g.

 Type of business (creative or supply driven)

 Nature of task (requires cooperation?)

2.2.4 – Trade unions

What is a trade union?

Trade union – Group of workers who have joined together to ensure their interest
are protected.

Why join a trade union?

 Improved conditions of employment

 Improved work environment
 Improved benefits
 Improved job satisfaction
 Advice/financial support
 Strengthen the number (many employees will join)

Disadvantages

 Costs money to be a member

 May be forced to take action e.g. strike even if you don’t agree