Understanding Organisational Structures

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Understanding Organisational Structures

What do you already know about organisational structure in businesses?

Learning Objective

At the end of the lesson you will be able to describe key organisational structure concepts and evaluate their impact on businesses.

What Is Organisational Structure?

Organisational structure outlines how roles, responsibilities, and reporting relationships are arranged in a business. It helps organisations achieve their goals efficiently.

Hierarchy, Chain of Command, Span of Control

Hierarchy refers to levels of authority. Chain of command is the formal line of reporting. Span of control is the number of employees a manager oversees.

Key Terms Explained

Span of Control

Hierarchy

Refers to how many people report directly to one manager. Wider spans offer more autonomy, narrower spans mean more supervision.

Describes layers of authority from top management to front-line workers. Higher positions mean more authority.

Tall Organisational Structure

Tall structures have multiple management layers and a long chain of command. Common in large, complex businesses like government or universities.

Flat Organisational Structure

Flat structures have fewer management layers and encourage more open communication. Common in start-ups and small firms.

Tall vs Flat Structures: Pros & Cons

Tall Structures

Flat Structures

✔ Clear roles, specialisation, promotion opportunities ✘ Slow decisions, communication barriers, bureaucracy

✔ Collaboration, quick decisions, innovation ✘ Role ambiguity, fewer promotion opportunities

Matrix Organisational Structure

Matrix structures combine traditional departments with teams for projects. Promotes collaboration but may create confusion in roles.

Matrix Structures: Pros & Cons

Disadvantages

Cross-functional teamwork, good use of expertise, flexible resource allocation.

Conflicting priorities, role confusion, need for high communication.

Advantages

Centralised vs Decentralised Structures

Decision-making shared across the organisation. Increases flexibility and motivation.

Decisions made at the top level. Promotes uniformity, but can reduce flexibility.

Centralised

Decentralised

Reflection: Why Structure Matters

Think about how an organisation’s structure can impact its efficiency and communication. What structure might suit different types of businesses?

Write down 3 things you learned in this lesson.

Write down 2 things you want to know more about.

Ask 1 question about something you haven't quite understood yet.