People in Business

Improving Organisational Structures

Improving Organisational Structures

Different styles of management

Business Studies A Level - ManagementManagement is concerned with using the resources available as effectively as possible in order to achieve the objectives of the business.

In a start-up or small business the owner also tends to be the manager. However, as a business grows so the managerial tasks can be delegated to others within the organisation. The main responsibilities of management are:

      • – to plan and set objectives
      • – to organise the workload into smaller tasks which can then be delegated
      • – to be in charge of staffing as in allocating the right job to the right person (otherwise known as Human Resource Management)
      • – to make decision, direct and give instructions
      • – to budget and be in charge of financial planning
      • – to co-ordinate the business

Delegation is one of the most important skills of management. It’s important that subordinates know what they need to do, how and for when. Managers should be confident that the subordinate is competent to deal with the task in that they have the skills and time for that task.

Management is composed of three basic levels:

– Senior management: they set the long-term plans and appraise the work of middle management.
– Middle management: they establish strategies for the departments and appraise departmental management.
– Supervisory management: they carry out the business’ day-to-day tasks.

From an organisational chart you can see:

– what departments make up the business
– the chain of command
– who is accountability to which manager
– the channels of communication that are used

Business Studies A Level - Organisational Chart

The chart also indicates line and staff relationships within the business:

– A line relationship is where there’s direct authority.
– A staff relationship is where there’s no direct authority but instead one of an advisory capacity.

Business Studies A Level - Overstretched EmployeeA number of large businesses try to delayer their organisation. In other words, get rid of a managerial layer. This helps to reduce costs, increases the speed of communication within the organisation, and increase the responsibilities of each employee.

However, if an employee is overstretched with too much work then this can have a negative effect and lead to de-motivation and possible absenteeism.

Traditionally decision-making was very centralised with all the major decisions made by senior management. There are advantages and disadvantages to this method.

Advantages Disadvantages
  • Tight control over all operations
  • Employees specialised in what they’re best at
  • Inflexible and bureaucratic
  • The decision-making process can take a long time
  • Little use of employees further down the hierarchy

Another management method is decentralised decision-making in which responsibility is not restricted to the senior level but, instead, spread out to other departments.

Advantages Disadvantages
  • Employees feel empowered
  • Faster and more efficient business
  • Increases morale and motivation amongst employees
  • Loss of control and power from the top
  • More chances of mistakes if more people involved in the decision-making process

A more common management method is matrix management. This is where employees from different apartments work together temporarily to reach a particular goal. Each individual within the team is accountable not only to their departmental manager but also their team manager.

Business Studies A Level - Matrix ManagementThe main issue with this method is that an employee can feel torn in loyalty between two managers and have difficulties in prioritising their work.

Another method is management by objectives. Each departmental manager sets their own objective based on the business’ objectives.

Due to the fact that the managers set their own objectives, this method is thought to improve morale and motivation. It also means that managers have to be careful how they plan their year as they’ll be held accountable.