Organisational structures Essay

An organisation can be defined as a group of people who work over a period of time together to achieve a common goal or objective. An organisational structure can be classified into a number of different types, examples are listed below: * Tall, flat, hierarchal * Line structures * Line and staff structures * Centralised and decentralised structures * Matrix structures Mars Confectionery in Slough comprises two factories and an office, all of which are situated in Slough Trading Estate. Their factories operate around the clock, 24 hours a day. The two main types of chart are a flat organisational chart and a tall organisational chart. A flat organisational chart is used when a company have very little hierarchy; there are few levels of authority and more departments. A tall organisational chart shows the hierarchical structure of the organisation, the different levels of authority. 2.4a Flat Organisational Charts- A flat organisational chart is when an organisation has very little hierarchy, there are few levels of authority. Mars have a tall organisational structure and also a tall hierarchal structure. The managing Director is at the top and below are seven departments. Each department is made up of a team. Flat Tall The advantages of an organisational chart is that is shows the position of your company at a particular time- needs reviewing. It can show anomalies and efficiency- shows faults in fundamental structure. It also shows new employees and shows a broad outline of the company and where they fit in. It is also essential for the day to day planning. The disadvantages are that it shows formal organisation- not personalities (people mould job). And it may lead to disputes if not applied rigidly. It also shows that companies status at only one point in time (when the chart is being drawn). After it has been drawn a new employee may start up at the organisation and then the old chart would need to be upgraded. This type of structure provides possibilities for promotion for any staff. Mars use â€Å"critical thinking† this is where managers are looking to promote someone with initiative, who can handle difficult situations and make the right decisions quickly. An organisational chart is a diagrammatic presentation of the structure of an organisation, showing the department within that organisation e.g. Finance, R&D, Administration, Personnel, Marketing, Sales Logistics and Production. An organisational chart also shows the level of responsibility and authority for individuals or departments, it also shows the span of control, so the number of people a person in supervising. At Mars they operate a line structure is the relationship between a senior and a subordinate at any level within the organisation. This is simple to understand so staff know exactly where they are in the structure. Managers will also have a clear understanding of the roles of people when allocating work. A centralised organisation is when decisions are made at the top of the organisation and the activities are shared out centrally. The advantage of centralisation are that the senior management is aware of how both internal external factors are likely to affect individual departments and the organisation in general. Decentralised structures are used when managers or supervisors take the authority in decisions The Mars decentralised because the head of each department has the authority to make decisions; therefore this saves time allow managers to take control of the work undertaken by their department and motivates staff because they have more responsibility. A matrix structure can be used by Mars when they are going to develop or launch a new product as it enable people from each functional area in order to complete the task. There are six types of organisational structures, which are line structures, staff structures, Functional structures, matrix structures, Centralised and De-Centralisation. 2.4b Line Structures Each unit is a microcosm of the whole. Each unit will have its own specialised staff carrying out the specialist management function. In a line structure, a company is usually organised into functional department, each headed by a senior manager, below whom is a chain of command. This shows there is a line of authority and responsibility as you go down the structure. For example, in Mars in the production department the line may pass down from production director to production manager, quality control, plant manager, process control, production supervisors and finally operatives. Each person in the line has authority of the one below. The advantages of a line structure is that it is simple to understand because staff know exactly where they are in the structure. Managers in Mars have a clear understanding of the roles of people when allocating work and spend less time monitoring work because subordinates are not distracted or confused by instructions from other sources. A well establishes line authority makes it possible for work to be delegated further down the line. Mars would use the line structure as it is simple to understand because staff know exactly where they are in the structure. The disadvantages are that it can involve a very long chain of command. Instructions may take a considerable amount of time to filter from the top and impact on the functional department, which would be a major drawback on a company in a rapidly changing market. Individuals may only respond to commands from their direct superior. The flow of information up the chain of command may take a long time, causing delays. 2.4c Staff Structures The senior management In Mars have a team of advisors to help them co-ordinate the activities of the whole organisation. A Mars member with the staff authority can provide services and advice to those in the line of authority in other departments. The training and recruitment of Human Resources management department are bound to involve other departments. Senior staff of Mars in the production department may have staff authority in the purchasing department. Mars staff in the finance department may have staff authority across all departments. Managers within Mars do not have the power or authority to control or give instructions, but rather the authority to deal with other departments and offer advice and services in relation to their problems. The advantages of staff structures are that it enables expertise and experience of specialists to be used to a greater extent across the Mars’ organisation. By having access to all areas of the business managers with staff authority can coordinate the organisations objectives and ensure a more immediate response to changes in technology or market conditions. Staff authority prevents individual departments from being too inward looking. In Mars it makes communication more efficient, without staff authority, communications between departments are a director level, and so any inter departmental communication ahs to pass up the chain of command in one department to director level and then down the other before it reaches the appropriate level. The disadvantages of a line and staff structure are that there is a risk that staff authority may diminish the authority of individuals in line management, particularly is those with staff functions acquire informal power and authority. In Mars this can lead to some subordinates becoming confused about whether they should take instructions from and be responsible to their line managers with staff authority. It can lead to clashes of personality and options. This may strain relations between staff, affecting productivity and morale. 2.4d Matrix Structures A matrix structure is an organisational structure set out as a grid, which shows the different ways an individual can be affected by authority. Here the projects need a variety of people from each functional area and there will be two managers that individual employees will have to report to. The advantages of the matrix structure are; making sure there is co-ordination between departments this is because it moves into the boundaries of each department boundary. This encourages greater flexibility and creativity, which is produced by the cross-fertilisation of knowledge and skills. It also enables lower staff to gain experience in management of a project team, which could be preparing them for promotion to become a higher manager. A disadvantage, however is that it can lead to confusion between project teams as individuals are involved in a large number of different relationships which create a complex pattern of authority and responsibility. In Mars they use a matrix structure which consists of specialist expertise who concentrate in specialist departments. Specialist staff are allocated to work on specialist projects. Project managers in Mars are responsible for completing the project calling on departmental specialise as they are needed. Promotion to higher levels of management is primarily based on technical expertise- merit or seniority. Communication chains are primarily downloaded and take the from of instructions and commands. This is an example of a Matrix structure used in Mars: Chief Executive The Mars Organisation structure is a grid showing the different ways an individual can be affected by authority. Here the projects need authority of people from each functional area and individuals will have to report to two managers. Organisational structures are divided by 1 product, 2 process, 3 customer, 4 geographical area. Division by product is when the organisation is separated by product lines. The advantage’s of a Mars matrix organisational structure is that it promotes an increased coordination between departments because it cuts across departmental boundaries-it encourages greater flexibility and creativity produced by cross fertilisation of knowledge and skills. It also allows for the involvement of relatively junior staff in Mars, giving them valuable experience in a wider field for the expression and application of their popular skills. The staff lower down the line structure can also gain valuable management development in a project team, preparing them for promotion. The involvement from specialists in other areas reduces the risks of resources being wasted on projects with no future. Matrix structures do have their disadvantages, the existence of a matrix structure in Mars and project teams can lead to confusion as individuals are involved in a large number of different relationships creating a complex pattern of authority and responsibility. A line manager may resent a subordinate receiving orders from anyone other than him or herself. 2.4e Centralised Organisations A centralised organisation is when decisions are made at the top of the organisation and the activities are carried out centrally. E.g. if a item needs to be purchased then all the purchases must go through the purchasing team. NO BODY has the authority to purchase separate items. Mars is not an example of a centralised organisation. Centralisation is where an organisation carries out its activities centrally in the business, so for example if an organisation wished to purchase equipment the purchasing department would carry it out, because no one else has the authority to do that. Most of the decisions are taken by employees at the top of the organisation and further down, they don’t need to make decisions. An advantage of centralisation is the fact that the management team is aware of how much internal and external factors effect each individual department and the organisations general, meaning decisions can be made, based on what Mars needs as a whole. 2.4f De-Centralisation Is when each department manager has the ability to organise his own services making the decision on a day to day bases for his functional area. Mars is an example of a decentralised organisation; because the authority to make decisions on many activities is put to managers and sometimes maybe even supervisors, which is what takes place in Mars. This means that each department manager has the ability to organise there own services, making the decision on a day to day basis for their functional area. 2.4g The relationship between Culture and structure and management: There is a clear relationship between the structure and the culture of the Mars’ organisation. Tall organisations tend to have a culture based on a ‘them and us’ attitude, which depends on where individuals stand in the hierarchy. There is likely to be a authoritarian culture. Mars have a tall organisational structure and also a tall hierarchal structure. The managing Director is at the top and below are seven departments. Each department is made up of a team. This means that an organisational chart shows the position of your company at a particular time- needs reviewing. It can show anomalies and efficiency- shows faults in fundamental structure. It also shows new employees and shows a broad outline of the company and where they fit in. It is also essential for the day to day planning Flat organisations tend to be more democratic, with multi directional flows of communication between organisational members, there is more likely to be a team approach. Matrix structures are more democratic than tall organisations. In the matrix people will mix with people from more than one functional area, so there is less likely to be a situation where departments become defensive of their territories. The matrix involves process teams this creates bonds between its team members and development of ideas. Hierarchical organisations are based on a top down approach which a main emphasis on communication. Centralised organisations are likely to lead a power based authoritarian structure. The centre of the organisation or team leaders will make or major dictions of the company. Distrust may be a major aspect from the centre of the organisation, people not involved or surrounded by the decision makers ill feel pushed out and unwelcome. An advantage of centralisation is the fact that the management team is aware of how much internal and external factors effect each individual department and the organisations general, meaning decisions can be made, based on what Mars needs as a whole. Decentralised organisations are most likely to be based on democratic structures teamwork and empowerment. Mars are not Delayering they are not laying people off when they want a flat organisational structure. This has not happened in Mars but this has happened in Nestle in 2002 who closed plants and made redundancies.