Organisational Structures

How a business is organised

Every business needs a way to organise its people: who reports to whom, and who decides what. The shape of that structure changes how fast it moves and how well it communicates. This module meets tall and flat structures, the chain of command and span of control, and the different ways of working.

The language of structure

Four ideas run through this module:

A tall or a flat structure

The number of layers changes how the business works.

Chain of command, span of control

Where decisions are made

In a centralised business the major decisions stay at the top, which keeps them consistent but can be slow. In a decentralised business decisions are spread to local levels, which is faster and can motivate staff. Either way, the more layers a structure has, the more chances there are for communication to break down.

Span in a tall structure

In a tall, hierarchical structure, what is the span of control usually like?

• Narrow, so each manager controls only a few staff
• Wide, so each manager controls very many staff
• Zero, because managers control nobody
• Always exactly the same as a flat structure

A flat structure

Select the TWO features of a flat structure.

• Few layers of management
• A wide span of control
• A long chain of command
• Many levels of management

Down the chain of command

Put an instruction passing down the chain of command into order, from the top.

• The managing director sets the overall goal
• A senior manager turns it into a plan
• A supervisor assigns the daily tasks
• The operatives carry out the work
• Results are reported back up the chain

Match each way of working

Faster local decisions

A business wants its local branches to make quick decisions for their own customers. What should it do?

• Decentralise, so branches decide for themselves
• Centralise every decision at head office
• Let nobody make any decisions
• Close all the local branches

Structure in words

The line of authority from top to bottom is the _____ of command. The number of people a manager controls is the _____ of control. A _____ structure has many layers, while a flat structure has few. Passing authority down to a subordinate is called _____. A _____ business keeps its major decisions at the top.

Flat against tall

Tap the TWO statements that are TRUE.

• A flat structure has a wide span of control.
• In a tall structure communication can be slower because there are more layers.
• A hierarchical structure has very few layers of management.
• Decentralised means all decisions are made at head office.
• Span of control means the line of authority from top to bottom.

Organise the business

A growing business is choosing how to organise its people. Make each choice.

• The owner has only a few staff and wants quick decisions. Which structure suits a small business best?
• The business wants its local branches to respond quickly to their own customers. What should it do?
• A manager is overloaded because too many staff report directly to her. What could help?

Tall or flat?

Compare a tall (hierarchical) structure with a flat structure, and explain when a business might choose each.

• Describe a tall structure, its chain of command and its span of control
• Describe a flat structure, its chain of command and its span of control
• Explain one advantage of each structure
• Explain what kind of business might suit each