2.2.1

Internal Organisational Structures

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Internal Organisational Structures

An organisational structure is the system that defines a hierarchy in an organisation. An organisational structure identifies every job in an organisation, the responsibilities of each job and how each job is related to other jobs.

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Hierarchy

  • A hierarchy just means layers, with certain jobs within the organisation having authority over others.
  • Jobs higher up in the hierarchy will therefore have more power in decision making.
  • The manager of a football team manages the players and guides them on what to do in a game. Jose Mourinho manages Paul Pogba in the hierarchy at Manchester United.
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Directors

  • Directors are at the top of an organisation’s hierarchy. They have the most influence over a company’s decisions.
  • Directors decide what the firm’s strategy is and make important decisions for the business as a whole.
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Managers

  • Managers are the next rung down on the ladder.
  • They help to communicate the strategy of the firm to their subordinates (people below them in the hierarchy).
  • They also organise the people below them in the hierarchy (span of control) to achieve the firm’s objectives.
    • Note – there may be more than 1 layer of managers within a firm.
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Supervisors

  • Supervisors are the lowest level of people in a hierarchy that are still responsible for managing other people.
  • They manage the people at the lowest level of the organisation.
  • These people usually manage specific projects that are conducted (done) in small teams.
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Operatives

  • Operatives are at the lowest level in an organisation. These people are not responsible for anyone else.
  • In a hotel, a normal cleaner is usually an operator.
  • Similarly in a restaurant, a pot washer is usually an operative and does not manage anyone else.
    • Factory workers are often operatives.

Jump to other topics

1Understanding Business Activity

1.1Business Activity

1.2Classification of Businesses

1.3Enterprise, Business Growth & Size

1.4Types of Business Organisation

1.5Business Objectives & Stakeholder Objectives

2People in Business

3Marketing

3.1Marketing & the Market

3.2Market Research

3.3Marketing Mix

3.4Legal Controls

4Operations Management

5Financial Information & Decisions

6External Influences on Business Activity

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