Organisational structure
Chapter 13
13.1 Organisations need structure
● Without any idea of structure, it would be impossible to know:
○ Who does which job?
○ Who is responsible for which decision?
○ The division of tasks and responsibilities
○ Which manager workers are responsible to
● A typical business structure is one that is based on departments and functions
● These departments are divided according to the type of work that is carried
out
● The structure can be illustrated by an organisational chart, which shows
important points about the internal organisation of the business
● This shows a traditional structure, functional structure
Functional structure: the departments have clearly defined roles and
responsibilities in a specialist area such as marketing, finance, HR
● This structure indicates:
○ Who has overall responsibility for decision-making
○ The formal relationship between different people and departments
○ The position of each individual in the business and who their line
manager is
○ The way in which accountability and authority may be passed down in
an organisation
○ The number of subordinates reporting to each senior manager
○ Formal channels of communication, both vertical and horizontal
○ The identity of the supervisors or manager to whom each worker is
accountable
, Business objectives and organisational structure
● An organisation consists of people who work together to achieve the
mission of the organisation
● Each individual fills is a certain role within the structure to achieve the
tasks set by the management
● Each person needs to have a specific role defined, including personal
accountability to complete tasks that help the business reach its goals
● The internal structure has to be designed to help achieve the objectives
● If the objectives change, so does the structure
● The divisions of responsibilities and the relationship between different
sections change in different circumstances
New competitors enter the market
● A more competitive market will need a quicker-acting and more flexible
structure
● The organisational structure will need to adapt and be flexible enough to allow
the bs to respond to changing conditions, including changing objectives
● The flexibility will allow the bs to meet the needs of the bs as they change
over time
The business grows and develops
● If the business grows, another
manager or supervisor might be required
● It could become too time-consuming
for one person to control the work of all
employees, even if delegation is used
● Then it has to be decided how
responsibilities will be divided - by function
or product
● This figure shows how the structure
of a furniture company changed after they
decided to make metal furniture too
● If the business further expands, then
further structural changes will be necessary
● Eg. spreading geographically
Chapter 13
13.1 Organisations need structure
● Without any idea of structure, it would be impossible to know:
○ Who does which job?
○ Who is responsible for which decision?
○ The division of tasks and responsibilities
○ Which manager workers are responsible to
● A typical business structure is one that is based on departments and functions
● These departments are divided according to the type of work that is carried
out
● The structure can be illustrated by an organisational chart, which shows
important points about the internal organisation of the business
● This shows a traditional structure, functional structure
Functional structure: the departments have clearly defined roles and
responsibilities in a specialist area such as marketing, finance, HR
● This structure indicates:
○ Who has overall responsibility for decision-making
○ The formal relationship between different people and departments
○ The position of each individual in the business and who their line
manager is
○ The way in which accountability and authority may be passed down in
an organisation
○ The number of subordinates reporting to each senior manager
○ Formal channels of communication, both vertical and horizontal
○ The identity of the supervisors or manager to whom each worker is
accountable
, Business objectives and organisational structure
● An organisation consists of people who work together to achieve the
mission of the organisation
● Each individual fills is a certain role within the structure to achieve the
tasks set by the management
● Each person needs to have a specific role defined, including personal
accountability to complete tasks that help the business reach its goals
● The internal structure has to be designed to help achieve the objectives
● If the objectives change, so does the structure
● The divisions of responsibilities and the relationship between different
sections change in different circumstances
New competitors enter the market
● A more competitive market will need a quicker-acting and more flexible
structure
● The organisational structure will need to adapt and be flexible enough to allow
the bs to respond to changing conditions, including changing objectives
● The flexibility will allow the bs to meet the needs of the bs as they change
over time
The business grows and develops
● If the business grows, another
manager or supervisor might be required
● It could become too time-consuming
for one person to control the work of all
employees, even if delegation is used
● Then it has to be decided how
responsibilities will be divided - by function
or product
● This figure shows how the structure
of a furniture company changed after they
decided to make metal furniture too
● If the business further expands, then
further structural changes will be necessary
● Eg. spreading geographically
