Organisational Structures

Who decides what

An organisational structure is how a business arranges its people: who does what, who reports to whom, and who has the authority to decide. **Four terms come up constantly, and they look like four separate definitions to learn. They are not.** Each one is an answer to the same question: **who decides?** - **Chain of command** - where a decision travels, from the top down - **Span of control** - how many people one decider can realistically oversee - **Delegation** - moving a decision down to someone below - **Delayering** - removing a whole level of deciders Hold that question and the four explain each other. Learn them as vocabulary and they will not stay put. ⚠️ This module covers the terms and why structures exist. **Whether a business should be tall or flat, and what that does to communication, has its own module.**

The four terms

Precise definitions. Vague ones are where marks go on this topic.

Find the widest span of control

An organisation chart. **Tap the manager with the widest span of control.** Remember that span of control counts only the people reporting DIRECTLY to that manager.

Match each term to what it controls

How many can one manager oversee?

A manager has four team leaders reporting to her, and each team leader has six staff. What is the manager's span of control?

• Four, because span of control counts only those reporting directly to her
• Twenty-four, because there are twenty-four staff beneath her
• Twenty-eight, counting everyone below her
• One, because she has one line manager above her

What delegation moves, and what it does not

Students routinely write that delegation passes the blame. It is the opposite, and the difference is examinable.

Why delegate at all

Select the TWO strongest business reasons for a manager to delegate.

• It frees the manager's time for work only they can do, such as planning and decisions that need their authority
• It develops the subordinate's skills and can motivate them, since being trusted with responsibility is itself a motivator
• It moves the blame onto someone else if the task goes wrong
• It reduces the total amount of work the business has to do

Removing a layer

Delayering means taking a whole level of management out of the hierarchy. It is a decision with effects in both directions, and an answer needs both. **What it gains:** - The chain of command gets **shorter**, so instructions and problems travel through fewer people - Management salaries are saved, which can be a large cost - Decisions can be made closer to where the work happens **What it costs:** - The managers who remain have **wider spans of control** and more people to oversee - Workload on those managers rises, and supervision of each person falls - Experience walks out of the door with the people removed, and morale among those left can suffer **Notice how the terms connect.** Delayering is defined by what it does to the chain of command and to spans of control, so you cannot explain it properly without those two. That is the point of learning them as one system.

Inside the hierarchy

The line of authority showing who reports to whom is the _____. The number of people reporting DIRECTLY to one manager is that manager's _____. Passing responsibility for a task down to a subordinate is _____, although _____ for the outcome remains with the manager. Removing a whole level of management is called _____, which shortens the chain of command but leaves the remaining managers with _____ spans of control.

Write about delegation precisely

Build a sentence that gets the responsibility-and-accountability distinction right.

Why structures exist at all

**"Explain why a growing business needs a formal organisational structure. (6 marks)"** "When a business is very small, everyone can see what everyone else is doing and decisions are made by talking to each other. Growth removes both of those conditions. **A structure defines job roles and responsibilities**, so each person knows what they are responsible for. Without that, work is duplicated in some places and left undone in others, because nobody can tell which is which. **It establishes a chain of command**, so employees know who to take a problem to and managers know who they are responsible for. Decisions then have a route to travel, rather than waiting for whoever happens to notice. **It makes accountability possible.** If nobody is identified as responsible for an outcome, no outcome can be answered for, which is a problem both for control and for improvement. **The consequence for the business is speed and control.** A structure does not make a business better at what it does; it stops growth from making it worse at coordinating what it does." **The shape to copy:** each paragraph names a feature of a structure, says what it prevents, and the last one says what all of it is FOR. An answer that only lists features has done two thirds of it.

Spot the reporting problem

A description of a small firm that has grown quickly. Tap the TWO details that describe a structural problem rather than an ordinary business difficulty.

• The firm has grown from six people to thirty in two years and orders are strong.
• Several staff say they are not sure who they should take a problem to, and two of them report to different managers depending on the day
• Margins are tighter than last year because material costs have risen.
• The owner still personally approves every order and now has twenty-two people reporting directly to her
• A competitor has opened nearby.

A growing business

The owner of that thirty-person firm asks for advice on her structure. Work through it.

• Twenty-two people report directly to her. What is the immediate problem?
• She is reluctant to delegate order approval because she is accountable if an order goes wrong. What do you say?
• Two staff report to different managers on different days. Why does that matter?

Your turn: design the structure

A bakery has grown from four staff to twenty-five across two sites. Advise the owner on organisational structure.

• Define chain of command and span of control, and explain the difference using the bakery as your example
• Recommend how many people should report directly to the owner, and justify the number
• Explain one task the owner should delegate and one she should not, giving a reason for each
• Explain what accountability means here, and why it does not move when a task is delegated