Transcript Org_Charts_PPT

An organisation chart (often called hierarchy)
takes into account….
The way in which human resources
(employees) are organised and
how information is communicated
It also shows:
 the CHAIN OF COMMAND – the layers
that information goes through
 The SPAN OF CONTROL – Number of
people any one person is in charge of
(subordinates)
Tall structure with a long chain of command
Problems of tall structures
with a long chain of command
Information takes a long time to go from the top to the people at the
bottom - this creates inefficiency.
Messages can be misunderstood, delayed or changed on their way
through the hierarchy.
The people at the bottom can become de-motivated due to their
position and lack of responsibility.
Managers at the top lose touch with the feelings of workers at the
bottom- this can cause resentment.
Wide structure and a short chain of command
Benefits of flat structures and
short chains of command
Communication is quicker and more accurate - message has to
pass through fewer levels.
Top managers are less remote from those at the bottom of the
hierarchy, therefore more in touch with them.
The span of control is wider, this gives subordinates more
responsibility and trust and thus increases their job satisfaction.
Organisation charts recap
Managing
Director
Production
Manager
Production
Supervisor
Production
workers x 5
HR Manager
HR Assistants
x2
Finance Manager
Finance
Assistants x 2
Marketing Manager
Marketing
Assistant
Title:
Centralisation v Decentralisation
• Centralisation is where many decision are
made at a central office (eg. Head office)
and then passed on to others in the
business
• May firms centralise their administration
activities
• Eg. A head office undertaking all the
marketing for a number of smaller branches
Title:
Centralisation v Decentralisation
• Decentralisation - decisions can be made
by individual parts of the business
Example: Centralisation
Tesco Head Office London decides on Pricing Policy
Individual stores have no or little control over pricing
Benefits of Centralisation
Senior management have more control
Procedures can be standardised (made
the same), leading lower costs
Senior managers make better quality
decisions
Communication is improved with fewer
decision makers
Benefits of Decentralisation
It motivates workers by given them
responsibility
It reduces the stress and workload of
senior managers
It can improve worker job satisfaction
Promotes flexibility and a faster response
to problems
Individual local level decisions can be
made quicker