Task 5 – Organisational Structure Organizational structure determines how the roles
Task 5 – Organisational Structure
Organizational structure determines how the roles, power and responsibilities are assigned, controlled, and coordinated, and how information flows between the different levels of management. It also determines how information flows from level to level within the company.
A structure depends on the organization’s objectives and strategy. In a centralized structure, the top layer of management has most of the decision making power and has tight control over departments and divisions. This means there are fewer decision makers, decisions are made by those at the top of the hierarchy, it speeds up decision making, it maintains tight control and it is bureaucratic. In a decentralized structure, the decision making power is distributed and the departments and divisions may have different degrees of independence. This delegates decision making, decisions are made at many levels within the hierarchy, it frees up management time, provides motivation and reduces bureaucracy.
Hierarchy is the structure of the workforce within an organisation showing who is accountable to whom. The levels of hierarchy within firms will differ. Tall and thin structures occur where each superior is responsible for a few subordinates. This allows for closer supervision. On the other hand, wide and flat means that each superior is responsible for a large number of subordinates this requires greater delegation but fewer levels allowing for quicker communication through the firm.
A matrix structure is one where teams are put together from different functional areas to work on specific projects. This can improve communication across functional areas, but can cause a potential loss of control and could cause conflict.
A holacratic structure is one where authority and responsibilities are shared amongst the workforce. It is a holistic approach where no one is the leader and teams will be formed to focus on specific projects. This mean shared responsibility and authority and supports a skilled and innovative work force, but it is dependent on trust and many decision makers can pose a threat of conflict.
If an organisational structure is not in place it could become very difficult within the business. Employees may have difficulty knowing who they have to report to and it can lead to uncertainty of who is in charge and responsible in certain situations. Having a structure in place can help improve efficiency and provide clarity for everyone at every level. That also means that each and every department can be more productive, as they are likely to be more focused as they know their exact role. It also allows employees to see clear routes of progression and what roles they can be promoted to in the future.
Tesco Corporate Governance Structure chart
Tesco organizational structure at store level
Tesco follows a hierarchical and tall organizational structure, reflecting the large size of the business. Functions are specifically divided in a long chain of commands. This type of structure helps in establishing defined roles for everyone thereby creating no chaos and confusion.
In the Tesco Corporate Governance Structure chart, Tesco PLC has a wide span of control as they delegate to the audit committee, the corporate responsibility committee, the nominations committee, the remuneration committee and the disclosure committee. On the other hand, at store level, the span of control is tall and narrow. Each person can only delegate to one or two people. Tesco’s has many leaders and people as heads of certain departments. This makes it easier for them to manage and control their employees and staff. Tesco’s have divided the responsibilities for leaders to look after certain amount of people.
Four layers of management within a store can generate annoying bureaucracy with a bad effect on coordination and collaboration among managers. So, possibly reducing layers of management could be done to create more flexibility and faster flow of information.
The benefits of having a tall structure are mainly coordination and efficiency. Employees know their roles entirely and know the requirements and what they are responsible for in order to perform well and satisfy their customers. It also allows for management of the company to run more smoothly when everybody has an individual place with a duty that they must complete. Even though communication is slow, there is a line of communication and responsibility. The clear chain of command shows clear line for messages. It also shows a clear route of progression showing employees the promotions they can get if they work hard enough, which can be motivating.
On the other hand, the negative aspect is that problems can take a long time to be fixed if they require another department. This is because a tall structure makes communication very slow and the system is rigid and inflexible.
This structure helps the business be successful because authority is strictly passed down which ensures good organisation and makes it easier to check on everybody’s work and guarantees that everything is done to the best standard. It also generates greater job satisfaction as employees have a duty that they must complete which is specific to them.
Oxfam has a flatter structure than Tesco because they don’t need as many employees as Tesco does. They also don’t have as many heads of departments as Tesco, because they have teams based at different places around world and all work together. Since they don’t have as many paid staff, their costs would be much lower. It would also mean that there would be a smaller number of managers, so they would have the responsibility of a large number of workers for the charity, which means that the staff wouldn’t be supervised as much because the manager has a much wider span of control. This could make the workers feel that they have much more responsibility which could make them more productive. However, because Oxfam has a flat structure, this could cause some confusion to the workers as it is less clear who they report to.
The organisational structure gets split into central, north, east and west. It shows te span of control is very large, but this is beneficial for Oxfam as it is easier for Oxfam to complete events and operations more effectively if they are spread all over the world. Being a large organisation, it benefits and is needed for employees and volunteers to make it easier as their goal is to help people worldwide.
Functional activities are how departments work within a business. It is grouping staff in a business with the criteria of the tasks they perform in mind. They help the organisation perform its day to day duties. The departments work on their own, but they are all working towards one common goal, such as providing good quality service in Oxfam. Even though Oxfam organises the business using geographical area, they also have functional areas higher up the hierarchy.
Oxfam have a