Organisational Charts & Roles (Cambridge International IGCSE Business)

Organisational Structures

Spec point — "• Simple hierarchical structures: levels of hierarchy, span of control, chain of command e.g. tall/short • Roles and responsibilities of directors, managers, supervisors, other employees in an organisation and inter-relationships between them"

Organisational structures

• An organisational structure outlines the reporting relationships, roles, and responsibilities of employees in the organisation

  • Businesses must determine what the best structure is for them so as to effectively implement ideas and achieve their objectives

    • They should consider how the structure may affect the management and effectiveness of operations and communications
    • A well-designed organisational structure helps to promote clarity, efficiency and accountability

An organisational chart

This organisation chart shows a traditional hierarchy where workers are answerable to the supervisor or manager who has authority over them in the structure

1. Hierarchy

• A hierarchy refers to the levels of authority within an organisation

  • It describes the ranking of positions from top to bottom
  • The higher the position in the hierarchy, the more authority and power it holds
  • The hierarchy usually includes top-level management, middle-level management, and lower-level employees

2. Chain of command

• The chain of command is the formal line of authority that flows downward from the top management to lower-level employees

  • It defines who reports to whom and who is responsible for making decisions
  • The chain of command helps to establish a clear communication channel and helps to maintain accountability within the organisation

3. Span of control

• Span of control refers to the number of employees that a manager or supervisor can effectively manage

• It is based on the principle that a manager can only effectively manage a limited number of employees

  • A narrower span of control means that there are more layers of management
  • A wider span of control means that there are fewer layers of management

Tall & Short Organisational Structures

Tall and short structures

• The chain of command and span of control are closely linked

  • A long chain of command usually results in a narrow span of control

    • This is known as a tall organisational structure

  • A short chain of command usually results in a wide span of control

    • This is known as a flat organisational structure

Characteristics of tall structures

• **Multiple levels of management **

• A long chain of command and narrow span of control

• Common in large organisations with complex operations

  • E.g. government agencies and universities

A tall structure

Evaluating tall structures

Characteristics of flat structures

• Fewer levels of management

• A short chain of command and wide span of control

• Common in small organisations or start-ups

  • E.g. tech start-ups and small businesses

A flat structure

A flat structure has few layers in it

Evaluating flat structures

• Some businesses may choose to remove layers from their hierarchy which shorten the chain of command

  • This is known as delayering

Exam Hint Remember the following distinctions:

• The longer the chain of command, the ‘taller’ the organisational structure and the ‘narrower’ the span of control
• The shorter the chain of command, the 'wider' the span of control

In exam questions, you may be asked to define a specific key term in this section or explain a type of organisational structure