Organisational structures
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Why structure matters
- Structure allocates roles, responsibilities, authority and reporting. An organisation chart shows the formal arrangement but not every informal relationship or communication channel. Business functions such as operations, HR, marketing and finance remain interdependent.
- Flat/tall concerns the number of levels, while centralised/decentralised concerns where decision authority sits. A flat structure may retain central control; a taller one may delegate or decentralise selected decisions. Do not treat the two distinctions as synonyms.
Levels and decisions are different
Hierarchical structure
- Span of control counts direct reports, not every person below a manager. Chain of command is the formal authority and reporting route through levels. Relative tallness means more levels; flatness means fewer, with effects depending on the work and total organisation.
- Fictional three-level chart: Head supervises A and B; A supervises C and D; B supervises E and F. Head’s direct span is 2, and four staff are indirect reports. In the two-level alternative Head directly supervises A–F, so span is 6. Both diagrams have seven positions; arrows show authority towards direct reports.
Three-level reporting example
Delegation
- Delegation assigns specified authority for a task or decision to another person. The manager retains overall accountability, while the recipient remains responsible for their own work. It differs from transferring every duty or removing the need for supervision.
- Clear outcomes, boundaries, resources, training, escalation and feedback can free management time and develop staff. If these are missing, extra responsibility can cause errors or overload. An experienced or inexperienced employee alike needs appropriate support for the task.
Specify supported delegation
Centralised and decentralised
- Centralisation concentrates important decision authority at senior or central levels. It may improve consistency or coordination and can allow quick central action, but can also create approval delays or rely on weak local information.
- Decentralisation gives meaningful decision authority to lower levels or locations. It can support timely local responses and responsibility, but needs capability, reporting and common standards. It does not automatically remove layers or mean every employee decides everything.
Place decisions where they fit
Other structures
- A functional structure groups work by specialism, such as operations, finance, marketing or HR. A common matrix example combines functional and project reporting; competing priorities need resolving clearly. Board requirements for these extension labels vary.
- An entrepreneurial structure commonly concentrates key decisions around an owner or founder. That is about decision concentration rather than a guarantee of size, speed or success. Use the actual reporting and authority evidence rather than relying on a label alone.
Roles
- Directors oversee company strategy and management in the classroom company example; managers coordinate work and resources; supervisors provide day-to-day oversight. People can hold several roles, especially in small firms. A director need not be the same person as a shareholder.
- Line managers directly supervise specified staff. Specialist support roles may advise other functions without having line authority over them; exact responsibilities depend on the organisation. HR can coordinate recruitment while line managers identify needs and participate in selection.
Communication
- Communication may travel downwards, upwards or horizontally. Verbal discussion, written records and digital channels have different strengths; select a channel suited to the message and audience, and check understanding.
- Jargon, overload, unclear responsibilities, unsuitable channels and extra handovers can create barriers. Fewer levels can shorten formal routes but wide spans can reduce individual support; speed and accuracy are not guaranteed by a structure label.
Communication can move in several directions
Changing structure
- Growth may require new coordination or reporting arrangements, but does not automatically demand more layers. Delayering removes management levels and may widen spans or reallocate duties. Evaluate skills, workload, service, morale and transition costs.
- Fictional salary calculation: two removed posts at £30,000 each reduce annual salaries by £60,000; subtracting £20,000 one-off transition costs gives £40,000 first-year saving before any other changes. This is not a complete profitability or redundancy-cost model.
A simple fictional delayering calculation
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Soal latihan
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1.What is an organisational structure?
Easy- Ahow a business is arranged and who reports to whom
- Bits profit
- Cits customers
- Dits price list
2.What is a manager?
Easy- Aa customer
- Ba supplier
- Ca lender
- Dsomeone responsible for directing others
3.What is a hierarchy?
Easy- Aa customer list
- Ba stock list
- Clevels of authority within a business
- Da type of tax
4.What is a tall structure?
Easy- Aone with no staff
- Bone with many layers
- Cone with few layers
- Done with no managers
5.What is a flat structure?
Easy- Aone with few layers
- Bone with many layers
- Cone with no staff
- Done with no customers
6.What is delegation?
Easy- Akeeping all decisions
- Bstopping work
- Cfiring staff
- Dassigning task or decision authority while retaining overall management accountability
7.What is a wide span of control?
Easy- Ano workers
- Bno managers
- Cmany direct reports to one manager
- Dfew workers
8.What is a narrow span of control?
Easy- Amany managers
- Brelatively few direct reports to one manager
- Cmany workers
- Dno workers
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