Unit - 7

Definition
Organizational Structure - refers to the levels of management and division of responsibilities within an
organization

3 main Features of Organizational Charts

 Departments
 Level of hierarchy
 Chain of command

Advantages of Organizational Charts

1. Know own position >> accountable to who / authority over who
2. Shows link of department
3. Gives the employees sense of belongings
4. Help to show who has authority to do different jobs

MUST KNOW
Delayering => Removing a whole level of management => to reduce costs

Instruction from TOP to BOTTOM >> chain of command

Owner Tall – narrow => more hierarchy level and less span of control
Hierarchy

(long chain of command)

Manager
Short – wide => less hierarchy level and more span of control

(short chain of command)

Supervisor

Span of Control

Advantages of short chains of command Disadvantages of short chains of command

i. quicker and more accurate i. lose control of their subordinates are
ii. more in touch with people below them doing
iii. encourage managers to delegate more ii. subordinates make many mistakes
iv. feel more trusted
Roles and Function of management
 Planning => setting aims or targets to get the direction or purpose
 Organizing => tasks must be delegated by manger and organize resources effectively
 Coordinating => bring together => manager need to make sure all departments in the
organization works together to achieve all the plans originally set by manager
 Commanding =>guiding, leading, supervising rather than giving instruction
 Controlling => measure and evaluate the works to gain the target => if one task is wrong, take
some corrective action
 Delegation => giving the authority to subordinate to perform particular tasks

Advantages for MANAGER Advantages for SUBORDINATE

 Able to concentrate his time on other
important management functions
 Less likely to make mistakes
 Can measure the success of the staff
more easily
 More interesting and rewarding
 Feels more important and believe that
trust is being put in them to perform a
job well
 Help to train workers and make
progress in the organization

Why Manager not delegate

 Afraid that subordinate might fail the tasks
 Want to control everything by themselves
 Risk that they might do better job than manager >>
make the manager insecure about the job

Without Clear and Effective Management >> business drift and eventually fail
 Lack sense of control
 Lack of coordinating >> wastage of effort
 Lack of control of employees
 Lack of organization of resources >> output and sales (-)
Things good managers do:

 Motivate employees
 Give guidance and advice
 Inspire employees to achieve more than they do
 Manage resources effectively such as keep costs under control
 Increase profitability

Effective Managers

Tasks Qualities

 Plan for future  Intelligence

 Organize and delegate  Self-confidence
 Coordinate departments  Determination
 Command and guide  Initiative
 Control and assess the work of  Good communication skills and Enthusiasm
departments

3 Leadership Style

1) Automatic – managers expect to be in charge of the business and to have their orders followed

Advantage Disadvantage
>> quick decision making >>demotivating due to no opportunity to
involve in decision making

2) Democratic – gets other employees involved in the decision-making process

Advantage Disadvantage
>>motivating due to involve in decision- >>unpopular decisions
making and results can better

3) Laissez-faire – broad objectives of the business known to employees and make them their own
decisions and organize own work

Advantage Disadvantage
>>encourage employees to show creativity >>inappropriate in organization which only
and responsibility need consistent and clear decisions
Trade union – a group of employees who have joined together to ensure their interests are protected

Effects of employees due to Trade union

Benefits Threats
 Strength in numbers  Costs money to be a member
 Improved working conditions  Workers may be required to take
 Services(insurance/social facilities) industrial action even if they don’t agree
 Possible influence on government
decisions
 Easy to get employed
 Improved conditions
 Advice if unfairly treated
 Improved pay
 Improved communications between
employees and managers
 Advice if dismissed
 Representation in grievances with
management

Effects of employers due to Trade union

Advantages Disadvantages
 Help improve communication between  Can organize strikes when they can’t
worker and manager negotiate with the working conditions and
 Easier to negotiate wage agreements with payments they deamnd
a trade union  Wages are likely to be higher >> costs(+)