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Organizational structure

Organizational structure . Small businesses tend to have very little organization. In medium to large businesses organizational structure is necessary for accountability and responsibility . . The larger an organization becomes the more structure it needs. Good structure helps to understand

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Organizational structure

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  1. Organizational structure • Small businesses tend to have very little organization. • In medium to large businesses organizational structure is necessary for accountability and responsibility.

  2. The larger an organization becomes the more structure it needs • Good structure helps to understand • Size, hierarchy and functional areas • Who their supervisor is • Who has responsibility • How are areas linked • Identify channels of communication

  3. CEO • Top of an organization Main roles include: • Act as a figurehead • Lead directors • Make objectives and policies • Let directors know problems and decisions • Make and implement corporate strategy

  4. The Board of Directors (BOD) Usually a top person for each department (Marketing, Finance, HR, and operations • Executive directors work at organization and make daily decisions • Non-executive directors do not work at organization and only advise the directors.

  5. Duties of BOD • Target setting • Making long-term plans • Establishing policies and codes • Watching and controlling organizations activities. • Hiring and watching staff • Support CEO

  6. Managment • People responsible for the day to day operations of the firm. • Help the BOD and take orders from them

  7. Supervisors and team leaders • Junior managers who have direct contact with the workers.

  8. Other employees • Work to achieve targets as given by managers • Make routine decisions in their job role • Provide support for other people

  9. Organizational charts are used for • Show the separation of departments. • Chain of command • Span of control • Channels of communication • Shows levels of staff

  10. Different ways to organize • Organization by function • Organization by product • Organization by process • Organization by area (geography)

  11. Organization by function Organization by function allows employees to interact with workers in similar jobs. Some examples of departments under the function method include but are not exclusive to: Production -responsible for making the good or service. Marketing - in charge of getting the information to the public Finance –in charge of the cash flow into and out of the company for the good or service. Human Resources/Personal – Getting employees

  12. Organization by Function of bike shop John’s Bike repair shop Finance Department In charge of cash flow Personal Department Responsible for hiring Appropriate people for The bike shop. Marketing Department Is in charge of getting information to the public about the bike shop. Production Department Is in charge of the repairs For the bike shop.

  13. Organization by Product or Activity • Separates the businesses into divisions. • This way each group can use different approaches to achieve there goal. • Each division acts independent within the overall business.

  14. Organization by activity John’s Businesses John’s bike shop John’s Supermarket Production Department Marketing Department Personal Department Production Department Finance Department Finance Department Personal Department Marketing Department

  15. Organization by area Some business may organize their divisions by region. They may have all of their interests managed under one business either by sections of a country a country or region of the world. Ex. Coca cola will has a Senior Manager for South America.

  16. Organization by Area John’s Bike Repair Business Beijing Division Xi an Division Hong Kong Division Production Department Production Department Production Department Personal Department Personal Department Personal Department M. Department M. Department M. Department F. Department F. Department Production Department

  17. Delegation is the passing of orders down a line so the authority is moved to another person other than the manager.

  18. Proper delegation allows managers to free themselves so the work on major decisions. • Good delegation also motivates staff

  19. SMARTER Objectives • Specific - What is trying to be achieved. • Measurable – Objectives need to be able to be measured. • Agreed – Be approved and understood by everyone. • Realistic – Objectives need to be obtainable. • Time specific – A time limit needs to set. • Ethical – Tasks must be delegated fairly • Recorded – tasks should be documented

  20. Span of control • Is considering with how many employees are under a manager’s control.

  21. A wide span of control occurs when a manager has many workers under him/her Advantages • Delegation is easier • Communication up and down is easier • Cheaper (less managers • People feel closer to the top

  22. A narrow span of control has fewer workers per manager. Advantages include: • Quicker communication inside the team • Easier to control and manage • Specialization • More promotions

  23. Deciding on the best model depends on: • Experience of manager • Nature of management styles • Skills of workers • Nature of the work • Type of production system used

  24. Levels of Hierarchy • Because of clear levels of communication it should be clear who reports to who. • One major drawback is workers can be isolated and it can be hard to help other departments

  25. Delayering • Removing levels of hierarchy from a business. (moving from narrow to flat)

  26. Reasons for delayering • Reduce cost because less managers • Improve communication speed • Encourage delegation

  27. Delayering/downsizing • Reducing number of core workers to make a business more flexible and reduce benefit costs.

  28. Problems with downsizing • Workers and managers become worried • Make worker loads to large • Flexibility forces workers to upgrade their skills. • Decision making may take longer

  29. Chain of command • The line of authority between the workers and CEO

  30. If a business is not structured correctly then • Staff motivation can decrease • People can do the same task more than once • Coordination can be reduced • Decision-making may be hurt

  31. Overall businesses try to be more flexible in there management styles. • One drawback is that this can create confusion.

  32. Page 226 • Responsibility – Things that an employee needs to get done • Accountability – knowing who should be responsible for what. • Directors or executives – elected by shareholders to run a company • Chain of command – line of authority

  33. Page 226 • Outsourcing - having external people from a business do work other than employees • Span of control – level of employees under a manager • Delegation - passing on of responsibilities down a chain of command. • Organizational chart– the diagram of a firm’s structure

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