Key elements of organisational structure

Textbook pages 135-137

Level of hierarchy: layers of management and supervision in an organisation

Chain of command: lines of authority in an organisation

Lines of communication: how information is passed around an organisation

Span of control: number of subordinates one manager/supervisor is responsible for

The number of layers in the structure

Many layers suggests a need for close supervision

Few layers suggests that employees are given authority to make decisions

Organisations with traditional cultures tend to have many levels in the hierarchy. Each manager/supervisor has limited responsibility

Small, dynamic businesses tend to have fewer

Layers and managers/supervisors have more responsibility

Wide span = directly responsible for many employees/subordinates

Gives employees chance for more authority to make decisions

Narrow span = directly responsible for a small number of employees/subordinates

Gives employees less opportunity for decision-making.

Read the case study “Who’s in charge?” and answer the questions

Key Term:Delegation: passing of authority to make

decisions to employees further down the

organisational structure

As a business grows, the entrepreneur needs to

delegate authority to other people in theorganisation because they will not have enough

time to do everything.This process of delegation is very difficult and

potentially dangerous (Sausage Wars) andshould be monitored closely in the early stages.

Read through the cast study : Pigott Pastries and

answer the questions