Organisational Structures

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.

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.

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.

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.

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.

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.

Business Functions and Definitions

A business is not just organised into a hierarchy. It is also organised according to the different functions (roles) of different parts of a business. E.g. A business might have a sales division, a customer service team and a human resources team. Some key definitions are:

Chain of command

Chain of command refers to the line of communication from the top of the hierarchy all the way to the bottom of the hierarchy. The directors are at the top and operatives are at the bottom.

Span of control

The span of control is the number of employees that a person in a position of power is responsible for. This number depends on the type of organisational structure at a business.

Delayering

Delayering is when an organisation decides to remove a layer in the hierarchy.
Often, companies remove a layer of middle managers. This can reduce labour costs and shorten the chain of command.

Delegation

Delegation means giving responsibility for certain tasks or functions to someone lower down in the organisational hierarchy. A manager may delegate responsibility for part of a project to someone lower down the hierarchy.

1Business Activity & Influences on Business

1.1Business Objectives

1.1.1Business Aims

1.1.2Business Objectives

1.1.3Business Objectives Change Over Time

1.1.4End of Topic Test - Business Aims

1.1.5Diagnostic Misconceptions - Profit

1.2Types of Organisations

1.2.1Sole Traders & Partnerships

1.2.2Limited Companies

1.2.3Limited Liability

1.2.4Unlimited vs Limited Liability

1.2.5Not For Profit & Franchises

1.2.6Multinational Companies

1.2.7End of Topic Test - Business Ownership

1.2.8Application Questions - Business Ownership

1.2.9Diagnostic Misconceptions - Company vs Business

1.2.10Diagnostic Misconceptions - Owners vs Shareholders

1.3Classification of Businesses

1.3.1Sectors

1.4Decisions on Location

1.4.1Location

1.5Business & the International Economy

1.5.1Globalisation

1.5.2Exchange Rates

1.6Government Objectives & Policy

1.6.1Government Objectives

1.6.2The Government & Business Activity

1.6.3Interest Rates

1.6.4Interest Rates - Calculations

1.6.5Diagnostic Misconceptions - Recessions

1.7External Factors

1.7.1External Factors

1.8What Makes a Business Successful?

1.8.1Measuring Success

1.8.2Reasons for Failure

2People in Business

2.1Internal & External Communication

2.1.1Communication

2.2Recruitment & Selection Process

2.2.1Types of Employment

2.2.2Recruitment Stages

2.2.3Effective Recruitment

2.2.4Legal Controls Over Employment

2.2.5Diagnostic Misconceptions - Internal Recruitment

2.3Training

2.3.1Training

2.4Motivation & Rewards

2.4.1Motivation in the Workplace

2.4.2Financial & Non-Financial Methods

2.4.3End of Topic Test - The Workforce

2.4.4Application Questions - The Workforce

2.4.5Diagnostic Misconceptions - Money

2.5Organisation Structures

2.5.1Organisational Structures

2.5.2Centralised vs. Decentralised Structures

2.5.3Tall & Flat Organisations

2.5.4Functional Areas Within a Business

2.5.5End of Topic Test - Org Structure

3Business Finance

3.1Sources of Finance

3.1.1Internal & External Sources of Finance

3.1.2Factors Affecting Sources of Finance

3.2Cash Flow Forecasting

3.2.1Cash Flow

3.2.2Consequences of Cash Flow Problems

3.2.3Cash Flow - Calculations

3.2.4Solutions to Cash Flow Problems

3.2.5Diagnostic Misconceptions - Cash Flow

3.3Cost & Break-Even Analysis

3.3.1Costs, Revenue & Profit

3.3.2Profit, Average Unit Cost & Interest

3.3.3Costs - Calculations

3.3.4Revenue - Calculations

3.3.5Break-Even Analysis

3.3.6Profit & Losses - Calculations

3.3.7End of Topic Test - Finance

3.3.8Grade 9 - Finance

3.3.9Diagnostic Misconceptions - Fixed Costs

3.3.10Diagnostic Misconceptions - Break-even

3.4Financial Documents

3.4.1Financial Statements

3.4.2Income Statement

3.4.3Understanding Business Performance

3.5Account Analysis

3.5.1Business Calculations

3.5.2Gross Profit - Calculations

3.5.3Net Profit - Calculations

3.5.4Business Calculations 2

3.5.5Business Calculations 3

3.5.6Liquidity

4Marketing

4.1Market Research

4.1.1Market Research

4.1.2Forms of Market Research

4.2The Market

4.2.1Customer Needs

4.2.2Satisfying Customer Needs

4.2.3Market

4.2.4The Competitive Environment

4.2.5Market Segmentation

4.2.6Market Mapping - Price vs Quality

4.2.7End of Topic Test - Marketing

4.2.8Application Questions - Marketing

4.2.9Diagnostic Misconceptions - Competition

4.3The Marketing Mix

5Business Operations

5.1Economies & Diseconomies of Scale

5.1.1Economies of Scale

5.1.2Diagnostic Misconceptions - Economies of Scale

5.2Production

5.2.1Production Processes

5.2.2Flow and Batch Production

5.2.3Production Efficiency

5.2.4Technology & Production

5.2.5Diagnostic Misconceptions - JIT vs JIC

5.3Factors of Production

5.3.1Factors of Production

5.4Quality

5.4.1Importance of Quality

5.4.2Identifying Quality

5.4.3Total Quality Management

5.4.4End of Topic Test - Operational Decisions

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