2.

Organising human resources

- Organisational structures arrange employees in order to show the following

information at a glance:
o Job titles
o Accountability
o Responsibility

- Businesses will adopt an organisational structure in order to function more

efficiently.

Delegation
 Is the passing on of control and authority to others in a firm.

Span of control
 Refers to the number of people who are directly accountable to a manager.

Levels of hierarchy
 Hierarchy in a business refers to the organisational structure based on a ranking
system.

Chain of command
 Refers to the formal line of authority through which orders are passed down in an
organisation.

Bureaucracy
 Is the execution of tasks that are governed by official administrative and formal rules
of a firm.
 Can be a source of inefficiency and frustration due to:
o Requirements to fill out unnecessary paperwork.
o Long official chains of command.
o Managers with duplicate roles and responsibilities.
Centralisation
 Centralized structures have a very small number of people at the top who control
the decision-making.

Advantages Disadvantages
- Rapid decision making. - Added pressure and stress for
- Better control. senior staff.
- Better sense of direction. - Inflexibility
- Efficiency. - Possible delays in decision making.
- Demotivating.

Decentralisation
 Decentralized structures have decision making authority and responsibility shared
with a greater number of people.

Advantages Disadvantages
- Input from the workforce. - Costly.
- Speedier decision-making - Inefficiencies.
- Improved morale. - Greater chances of mistakes.
- Improved accountability. - Loss of control.
- Teamwork. - Communication issues.

Delayering
 Is the process of removing one or more levels in the hierarchy.
 It is designed to widen the span of control at each level.

Advantages Disadvantages
- reduces costs. - Creates anxiety and a sense of
- Improves the speed of insecurity.
communication. - Overloads staff
- Encourages delegation and - Decision-making can take longer.
empowerment.
Matrix structures
 Organises employees from different departments to temporarily work together on a
particular project.

Advantages Disadvantages
- Improved communications - Added workloads.
- Maximises skills set of the - Difficult to coordinate.
workforce. - Time consuming.
- Cost-effective.

TYPES OF ORGANISATIONAL CHARTS

Organisational charts
 Are diagrammatic representations of firms’ formal structures.

Flat organisational structures

 Have fewer levels in the hierarchy.
 Managers tend to have a wider span of control.

Tall organisational structures

 Have many levels in the hierarchy.
 Managers tend to have a narrower span of control.

APPROPIATNESS OF DIFFERENT ORGANISATIONAL STRUCTURES GIVEN A CHANGE IIN

EXTERNAL FACTORS

Organisation restructuring
 Is the reorganizing of human resources of a firm into a new organisational structure.
Change in organisational structures

Project-based organisations  These firms organise their human resources around

particular projects or development plans.

Benefits Drawbacks
- Flexibility - Discontinuity
- Productivity - Isolation
- Efficiency - Inefficiencies
- Motivational - Conflicting interest and priorities

Handy’s Shamrock Organization  He proposed that human resources should be organised

into:
 Core staff
 full time workers who handle the daily operations of the business.
 They are crucial to the firm’s operations, survival and growth.
 Outsourced workers
 Individuals or businesses paid to complete particular and specialized tasks.
 Peripheral workers
 Part-time, temporary and portfolio workers who are employed when needed.