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Business organization - Assignment Example

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In formal organisation structure the lower level workers give statement to higher level manager. The structure of organisation also varies according to size, geographical position, managerial employees, and product or service offered by the organisation (New Age International, n.d.). …
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Download file to see previous pages The structure of organisation can be of four types namely, functional, horizontal, divisional and that of matrix.
The functional structure is also recognised as ‘vertical dimension’. This kind of organisation is based on people who have the power to make decision in the organisation. The ‘span of control’ is the vital part in this type of organisation. The span of control can be recognised as the number of employees who have the power to give report to the boss inside the organisational hierarchy. This is based on the status and management system of the organisation (Fontaine, 2007).
The status plays important role in this organisational structure. As there are many hierarchical levels it is quite difficult for lower level employee or manager to report to high level person with high status because each level has its own rules and regulations. The decision making process is quite slow as the communication has to pass through different levels of the organisation and approval is needed in every level. The interaction between high level managers and employees is less compared to flat organisational structure. Higher cost is required in tall structure because the decision making process is too slow.
As the managers have limited workers under them, they can supervise or train them more effectively. In tall structure there is opportunity of improvement or promotion in career.
For example, General Motors, an American automotive manufacturing company has tall organisation structure. It has almost 12–16 levels between the top to the bottom level. Thus, the managers in General Motors have ‘narrow span of control’ i.e. there is approximately 5–6 workers who can give statement to any individual manager. A large number of organizational levels can lead to job insecurity of workers and loss of professional skill (Fontaine, 2007). Flat organisational structure: In this organisational structure, there is less hierarchical level. Thus, the manager possess ‘wide span of control’. The manager builds good social relationship and establishes friendly environment which can confer power to the staffs. Source: (Fontaine, 2007). Flat organisational structure assists in higher level of interaction between staffs and managers. Thus, the process of communication is usually faster, reliable and much efficient compared to tall organisation structure. The leaders tend to be more democratic in nature and thus it leads to superior level of innovation. This type of organisational structure is more elastic and compliant compared to taller structure. The decision is not based on the status of the manager. It is based on need of the people. The employees possess more power to arrive at a decision instantly. Faster decision provides the organisation, high level of liveliness and mobility. The flat ...Download file to see next pagesRead More
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