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2.2 – Organization and Management

Home Notes Business Studies – 0450 2.2 – Organization and Management

Organizational Structure

Organizational structure refers to the levels of management and

division of responsibilities within a business. They can be represented on
organizational charts (left).

Advantages:

All employees are aware of which communication channel is used

to reach them with messages
Everyone knows their position in the business. They know who they
are accountable to and who they are accountable for
It shows the links and relationship between the different
departments
Gives everyone a sense of belonging as they appear on the
organizational chart

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The span of control is the number of subordinates working directly
under a manager in the organizational structure. In the above figure,
the managing director’s span of control is four. The marketing director’s
span of control is the number of marketing managers working under
him (it is not specified how many, in the figure).

The chain of command is the structure of an organization that allows

instructions to be passed on from senior managers to lower levels of
management. In the above figure, there is a short chain of command
since there are only four levels of management shown.

Now, if you look closely,there is a link between the span of control and
chain of command. The wider the span of control the shorter the
chain of command since more people will appear horizontally aligned
on the chart than vertically. A short span of control often leads to long
chain of command. (If you don’t understand, try visualizing it on an
organizational chart).

Advantages of a short chain of command (these are also the

disadvantages of a long chain of command):

Communication is quicker and more accurate

Top managers are less remote from lower employees, so
employees will be more motivated and top managers can always stay in
touch with the employees
Spans of control will be wider, This means managers have more
people to control This is beneficial because it will encourage them to
delegate responsibility (give work to subordinates) and so the
subordinates will be more motivated and feel trusted. However there is
the risk that managers may lose control over the tasks.

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Line Managers have authority over people directly below them in the
organizational structure. Traditional marketing/operations/sales
managers are good examples.

Staff Managers are specialists who provide support, information and

assistance to line managers. The IT department manager in most
organisations act as staff managers.

Management
So,, what role do manager really have in an organization? Here are their
five primary roles:

Planning: setting aims and targets for the organisations/department

to achieve. It will give the department and it’s employees a clear sense of
purpose and direction. Managers should also plan for resources
required to achieve these targets – the number of people required, the
finance needed etc.
Organizing: managers should then organize the resources. This will
include allocating responsibilities to employees, possibly delegating.
Coordinating: managers should ensure that each department is
coordinating with one another to achieve the organization’s aims. This
will involve effective communication between departments and
managers and decision making. For example, the sales department will
need to tell the operations dept. how much they should produce in
order to reach the target sales level. The operations dept. will in turn tell
the finance dept. how much money they need for production of those
goods. They need to come together regularly and make decisions that
will help achieve each department’s aims as well as the organization’s.
Commanding: managers need to guide, lead and supervise their
employees in the tasks they do and make sure they are keeping to their
deadlines and achieving targets.
Controlling: managers must try to assess and evaluate the
performance of each of their employees. If some employees fail to
achieve their target, the manager must see why it has occurred and
what he can do to correct it- maybe some training will be required or
better equipment.

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Delegation is giving a subordinate the authority to perform some

tasks.

Advantages to managers:

managers cannot do all work by themselves

managers can measure the efficiency and effectiveness of their
subordinates’ work

However, managers may be reluctant to delegate as they may lose their

control over the work.

Advantages to subordinates:

the work becomes more interesting and rewarding- increased job

satisfaction
employees feel more important and feel trusted– increasing loyalty to
firm
can act as a method of training and opportunities for promotions, if
they do a good job.

Leadership Styles
Leaderships styles refer to the different approaches used when
dealing with people when in a position of authority. There are mainly
three styles you need to learn: the autocratic, democratic and laissez-
faire styles.

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Autocratic style is where the managers expects to be in charge of the

business and have their orders followed. They do all the decision-
making, not involving employees at all. Communication is thus, mainly
one way- from top to bottom. This is standard in police and armed forces
organizations.

Democratic style is where managers involve employees in the

decision-making and communication is two-way from top to bottom as
well as bottom to top. Information about future plans is openly
communicated and discussed with employees and a final decision is
made by the manager.

Laissez-faire (French phrase for ‘leave to do) style makes the broad
objectives of the business known to employees and leaves them to do
their own decision-making and organize tasks. Communication is
rather difficult since a clear direction is not given. The manger has a very
limited role to play.

Trade Unions
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A trade union is a group of workers who have joined together to

ensure their interest are protected. They negotiate with the employer
(firm) for better conditions and treatment and can threaten to take
industrial action if their requests are denied. Industrial action can include
overtime ban (refusing to work overtime), go slow (working at the
slowest speed as is required by the employment contract), strike
(refusing to work at all and protesting instead) etc. Trade unions can also
seek to put forward their views to the media and influence government
decisions relating to employment.

Benefits to workers of joining a trade union:

strength in number- a sense of belonging and unity

improved conditions of employment, for example, better pay,
holidays, hours of work etc
improved working conditions, foe example, health and safety
improved benefits for workers who are not working, because they’re
sick, retired or made redundant (dismissed not because of any fault of
their own)
financial support if a member thinks he/she has been unfairly
dismissed or treated
benefits that have been negotiated for union member such as
discounts on firm’s products, provision of health services.

Disadvantages to workers of joining a trade unions:

costs money to be member- a membership fee will be required

may be asked to take industrial action even if they don’t agree with
the union- they may not get paid during a strike, for example.
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Notes submitted by Lintha

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9 thoughts on “2.2 –
Organization and Management”
sanyagodha says:
February 5, 2022 at 9:18 am

i have my exam after a day and I’m preparing from these notes, they’re
so
brief and helpful. Perfect for last-minute revision! thanks a lott ur a
lifesaver:))))

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Vedant says:
March 8, 2021 at 8:02 pm

this was so helpful

i got 95/100 in business by just studying these notes

REPLY
 Lintha says:
March 9, 2021 at 2:19 pm

OMGG THIS IS AMAZING!! So glad to hear it!

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ahmed says:
November 20, 2020 at 10:38 am

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Sarah says:
November 22, 2020 at 10:25 am

We’re so glad the notes have been helpful!!

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Have you tried Z notes and smartnotes, though?

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Janita James says:

November 1, 2020 at 4:41 pm

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and business.

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Sarah says:
November 2, 2020 at 8:55 pm

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Ibrafarzat says:
October 8, 2018 at 1:18 pm

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Sarah says:
October 16, 2018 at 3:17 pm

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We will definitely take into account your third request, however!

Thank you for your constructive criticism and good luck with your
exams!

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