In a centralised organisation head office (or senior managers) will retain the major responsibilities and powers. On the other hand decentralised organisations will spread responsibility for specific decisions across various lower level managers, including branches or units located away from head office. An example of a decentralised structure is Tesco the supermarket chain. Each store of Tesco has a store manager who can make certain decisions concerning their store. The store manager is responsible to a regional manager.Organisations may also decide that a combination of centralisation and decentralisation is more effective. For example functions such as accounting and purchasing may be centralised to save costs. Whilst tasks such as recruitment may be decentralised as units away from head office may have staffing needs specific only to them.
Certain organisations implement vertical decentralisation which means that they have handed the power to make certain decisions, down the hierarchy of their organisation. Vertical decentralisation increases the input people at the bottom of the organisation chart have in decision making.
Horizontal decentralisation spreads responsibility across the organisation. A good example of this is the implementation of new technology across the whole business. This implementation will be the sole responsibility of technology specialists.
Organisational Structures differ from business to business depending on how big they are and what their aims are. Generally small businesses adapt a flat structure and larger business adapting a tall structure, also a flat structure will have a smaller chain of command and a larger span of control. Alternatively, a tall structure will have a larger chain of command and a smaller span of control
Chain of command means the lines of authority within a business. It is the order in which authority and power in an organization is delegated from top management to every employee at every level of the organization. Instructions flow downward along the chain of command and accountability flows upward. Military forces are an example of straight chain of command that extends in unbroken line from the top to ranks.
Division of labour is another word for something like specialization in the production process. Complex jobs can usually be less expensively completed by a large number of people each performing a small number of specialized tasks than by one person attempting to complete the entire job. Division of labour is the basic principle underlying the assembly line in mass production systems.
Span of Control refers to the total number of people which a manager or an administrator can effectively control and supervise. Therefore, span of control means the number of subordinates which a superior can effectively supervise. Every superior can supervise a limited number of employees. Therefore, every superior should be assigned or given an authority to handle only few subordinates.
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A company organised with a functional structure, group’s people together into functional departments such as purchasing, accounts, production, sales, and marketing. These departments would normally have functional heads that may be called managers or directors depending on whether the function is represented at board level. Functional structures are perhaps the most common organisational model used by companies.
There are many different functional areas a business may have, for example Production, Marketing, Accounts and Human Resources.
Production is the basic activity of all industrial units. All other activities revolve around this activity. The end product of the production activity is the creation of goods and services for the satisfaction of human wants. The production activity is nothing but the step-by-step conversion of one form of materials into another either chemically or mechanically. The basic inputs of the production processes are man, machines, plant, services and methods.
The Marketing Department plays a vital role to the sales department. The main thrust is to make the product look and feel attractive enough to purchase. There are many things that the marketing department does. It creates and administers the advertising of a product, usually from conception to completion. It develops campaigns to promote the product to distributors and customers. Marketing also develops the branding, for instance the logo, the slogan, that will be used in advertising. Marketing creates the kits or packaging that the product will be housed in, and is responsible for all press releases.
The department of a business takes responsibility for organising the financial and affairs including the preparation and presentation of appropriate accounts, and the provision of financial information for managers. Managers require ongoing financial information to enable them to make better decisions. For example, they will want information about how much it costs to produce a particular product or service, in order to assess how much to produce and whether it might be more worthwhile to switch to making an alternative product. The finance department will also be responsible for the technical details of how a business raises finance e.g. through loans, and the repayment of interest on that finance. In addition it will supervise the payment of dividends to shareholders. To sum up, the accounting department simply does all paperwork within the business.
An organization's human resource management strategy should maximize return on investment in the organization's human capital and minimize financial risk. Human resource managers seek to achieve this by aligning the supply of skilled and qualified individuals and the capabilities of the current workforce, with the organizations ongoing and future business plans and requirements to maximize return on investment and secure future survival and success. In ensuring such objectives are achieved, the human resource function is to implement an organization's human resource requirements effectively, taking into account federal, state and local labour laws and regulations; ethical business practices; and net cost, in a manner that maximizes, as far as possible, employee motivation, commitment and productivity.
Asda adopts a hierarchical organisational structure as it has many layers and also a lot of people reporting into more than one person before that information gets to the management. This would be useful for Asda because they have lots of layers which a hierarchical organisational structure would help to organise people. It would also help with communication because everyone knows who they have to talk to, to get information from the bottom of the business to the very top.
A hierarchical structure has lots of levels. Each level is controlled by one person. A hierarchical company tends to be a very big company just like Asda is. In a hierarchical structure instructions are generally passed down from one person to another until it gets to the bottom of the structure. If there was a problem in a hierarchical structure it would move up through the structure again from one person to another until it gets to where it is needed.
In a hierarchical structure there is always constant control with workers. Workers in Asda will know exactly what they have to do so they don’t waste time and wait around until they are told what they have to do. There is a small span of control, and also there is a better chance for promotion.
The disadvantages to a hierarchical structure are that all information is slow moving, there may also be poor communication between departments. Also workers may not feel involved in the business and they may have problems with feeling motivated to work.
The type of communication used in a hierarchical structure will be more written communication. It will be written communication because the information will have a long way to go before it gets to the person. If it was verbal then when the message gets passed on it will change along the way.
Children in need adopts a regional organisational structure, because it has managers all over the UK who will have a section of the business according to the location to oversee, then all the managers will report to the highest manager who will makes decisions from there. Each regional manager will have an equal span of control, which will make the organisation more controlled.
Instructions are generally passed down from the highest manager down to the regional managers and then passed down from there until it reaches the needed person, just like a hierarchical organisational structure.
The disadvantages of a regional organisational structure is that problems will take a significantly longer time than a smaller business, this is because Children in Need is a large business therefore if an instruction wanted to be passed down from the top of the organisational to the bottom, it would take significantly longer.
D’Anna Ward Monday, 7 November 2011
