2.5.2

Organisational Structures 2

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The Impact of Organisational Structure on Managing

Organisational structure has implications for how an organisation is managed.

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Number of employees monitored

  • Having a flat organisational structure normally means that each manager is responsible for more employees. This can make it harder for a manager to monitor each employee really closely.
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Communication

  • If communication has to go through lots of layers, then it will be slower. This can make it hard to make changes or pass on a message.
  • In a flat organisational structure it can be easier for directors to make changes happen faster. Employees low down the hierarchy can communicate problems more quickly.
  • However, if the span of control is too wide then it can negatively affect communication because it is harder for managers to communicate with all the people they are responsible for.
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Chain of command length

  • Having a flatter organisational structure may mean managing more people but it creates a shorter chain of command, making communication between layers easier.

Contracts of Employment

A contract of employment is a legal agreement between a business and an employee. It contains information on the pay of the employee, their roles, the start and end date of their employment and the hours they will work. It also gives information on sick leave, holiday pay and maternity or paternity leave. There are different types of employment (and contracts):

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Part-time

  • A part time contract is a form of employment where people work less hours per week than people with a full-time job.
  • These employees usually work in shifts and usually work under 30 hours per week.
  • Part-time employment contracts can be better for both businesses and employees because they offer more flexibility. If the business is only busy at certain times of the week or certain months in the year then part-time contracts can be helpful.
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Full-time

  • A full-time contract is a contract where the employee will work a minimum number of hours. This number is defined by the contract.
  • Full-time employment contracts give businesses more control over the hours that employees work. Employees work a minimum number of hours each week and this gives businesses and employees certainty.
  • For employees, although part time contracts offer greater flexibility, full time contracts offer certain benefits that are not typically offered by part time contracts.
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Job share

  • A job share happens when two people share a full-time job.
  • This is good because it gives the employees more flexibility and for a business, it guarantees the number of hours that will be worked.
  • But, organising a job share can be hard and it requires very good communication between the two employees and the business.
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Zero-hour contracts

  • Zero-hour contracts are contracts where a business does not have to give a person any work at all and the employee doesn’t have to accept any work offered to them.
  • They are beneficial for businesses because they provide the maximum amount of flexibility. This means they are less likely to waste money on unnecessary labour costs.
  • However, they can be bad for employee motivation because the employees won’t feel a high level of commitment to a company.

Jump to other topics

1Enterprise & Entrepreneurship

1.1The Dynamic Nature of Businesses

1.2Spotting a Business Opportunity

1.3Putting a Business Idea into Practice

1.4Making the Business Effective

1.5Business Stakeholders

2Building a Business

2.1Growing the Business

2.2Making Marketing Decisions

2.3Making Operational Decisions

2.4Making Financial Decisions

2.5Making Human Resource Decisions

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