2.2.1 Organisational Charts
Organisational Structure is like the skeleton and nervous system of a business. It shows where power, authority, responsibility and status lie, and how communication flows throughout.
Most likely, you will already have experience of how organisational structure and the associated concepts work from the hierarchy at your school, or a sports team you are a member of.
Here is a simple example for Learn Rite school,
At the top of the chart is the director, who is in charge of the entire organisation and sets the direction for the school.
The Head Teacher in next in line, who is in charge of three department heads. They in turn have authority over the teachers in their departments.
Businesses are organised in the same way. Let’s have a look at the Higher Arc EY Ltd.
It makes clear who is in control of each section, and who has the authority to make decisions.
Hierarchy shows who is the boss of who. Put simply, who gets to tell someone else what to do. The managing director has authority over the operations, marketing and finance managers, but must follow the instructions of the board of directors.
Chain of command is how authority is passed down in an organisation. So if the operations manager is responsible for the overall production of cars an individual employee may be responsible for quality control.
In this way it brings order to an organisation. Employees know who they take instructions from, managers and leaders know what their authority is, what they can and can’t do without permission from their boss.
It also means individuals can be held accountable. If sales start to fall the marketing manager will have to explain why, and take action to solve the problem.
Span of control is the number of employees one manager or leader has authority over. In Higher Arch the marketing manager has a span of control of two employees, while the operations manager has a span of control of 3 employees.
A larger span of control will mean less control for the manager or leader as they will have more subordinates to supervise.
A larger span of control usually leads to more delegation of authority to subordinates. The manager or leader will not be able to directly control many subordinates. A narrow span of control will mean more control and less delegation. This is the conflict between trust and control.
In order to delegate authority the manager or leader must have confidence that the subordinates can complete the task and allow them to get on with it. It is up to the manager or leader how much authority they delegate, they will be ultimately responsible but can’t do all the tasks single handedly.
A highly controlling manager will not be effective at delegating due to a lack of trust and they will constantly check subordinates’ work. There is an important link here to leadership styles, which we will explore later in this unit.
A larger span of control and greater delegation is usually associated with highly skilled and experienced employees who need less direct supervision.
Managers may be reluctant to delegate, as they don’t trust subordinates to do a good job and fear losing control. However, delegation can be hugely beneficial to a skilled leader who can delegate effectively. It means increased motivation among subordinates and managers can focus on more important tasks.
Roles and responsibilities of directors, managers, supervisors, other employees in an organisation
Directors are responsible for the big picture, setting out the vision and the long term goals for the business and providing inspiring leadership to get there.
They are ultimately responsible to the shareholders (owners of the business) so need to protect their interests.
Managers are responsible for delegating tasks, motivating employees, and solving day to day problems, so that the goals of the directors are achieved.
Supervisors, more often known as team leaders, and employees, work efficiently towards smaller goals set by managers.
If there is a big problem or issue they need to pass the information up through the organisation.
Many managers or supervisors will hope to perform well so they can gain promotion to a higher position in the hierarchy.
Note on managers and leaders: at IGCSE you don’t need to know the difference between managers and leaders. The terms are often quite interchangeable. In different businesses a leader may be called a manager or a manager a leader and so on. So I will use both terms throughout.
2.2.2. Functions of Management
Functions of Management is less likely to be a long answer question, you may be asked to identify and explain different functions of management.
| Past Paper Question Example ???? Paper 1 a) Identify two functions of management Function 1: …………………………………………………………………………………………………………. Function 2: …………………………………………………………………………………………………………[2] |
In reality, managers or leaders may complete many functions at the same time or situation. For example, an operations manager at a meeting with other department heads will be planning further steps, but also co-ordinating plans with other managers and controlling, through reviewing if previous targets have been met.
To help we will go through a day in the life of Richard who is a marketing manager
In the morning he plans for the next marketing campaign.
He will then coordinate with the finance manager to make sure there is sufficient budget for the campaign.
Organise the different task to be carried out and delegate to the marketing team
Then command the photographer to complete the publicity shots – and motivate by setting a target for completion date.
Control by looking at the sales figures from the last campaign and checking if targets have been met.
2.2.3 Leadership Styles
Leadership styles is quite a popular structured essay question as it lends itself towards evaluation and decision making.
| ⭐⭐⭐Top Tip ⭐⭐⭐ It’s helpful to learn an example for each leadership style, either from your own experience or a famous leader in business, politics or sports. |
Autocratic Leadership could be described as command and control. Decisions are made by the leader, alone, without discussion. Information is one way, so leaders will check only to make sure the instructions have been carried out, not to get feedback from employees.
It’s suitable for emergency situations at work, for example a flood or a power cut, or can be used to manage employees of low skill levels.
In long term autocratic management can lead to low motivation and bad quality decisions.
In democratic leadership the key thing to remember is consultation. There is discussion with subordinates before taking a decision.
Democratic leadership does not mean there is a vote on decisions. The manager is ultimately responsible and they are not forced to follow the advice of employees.
It can lead to higher quality decisions and higher motivation, especially if employees are more skilled, experienced and want to be involved in decisions.
However, it is more time consuming to make decisions and arguably requires a confident manager with a higher skill level to allow a suitable level of feedback.
Laissez-Faire translates as “let them do it”. Leaders will support and coordinate and set broad goals, but it will be left to team members to work independently day to day. It can be suitable for highly skilled and motivated employees, often in creative or technical posts like research and development. However, most employees require goal setting and direction to keep their focus. A completely hands off Lassiez-Faire leadership style can cause worker demotivation.
Recommend and justify an appropriate leadership style in given circumstances
| Past Paper Question Example ???? Paper 2 (b) Consider the three main styles of leadership Bob could use in his business. Which leadership style do you think he should use? [12] |
Although officially Cambridge always says there is no right answer in any evaluation question, democratic is generally the easier one to justify in leadership style questions.
Leaders should consult with employees before making decisions, apart from exceptional circumstances, like emergency situations where quick action is required. Autocratic leadership also prevents the flow of feedback. Lassiez Faire is only suitable with highly skilled, creative or technical professions, and still requires leaders to set goals and direction.
However, there are useful factors to consider when making your final evaluation.
Managers’ skill level and experience – if a manager instinctively has an autocratic or democratic style it can be very difficult to change.
Employees skill level and the speed at which the task must be completed. If employees are low skilled or inexperienced, directions will be more likely to be top down from the leader and there will be less opportunity for feedback.
2.2.4 Trade Unions
Trade Unions don’t come up on the exam that often, possibly because unions are much stronger in some countries rather than others. However, you do need to know the basics. A trade union is an organisation of employees who aim to improve the pay and conditions of their members.
Trade Unions are all about the power of the collective, as one person if you ask for more pay from a business they are much less likely to take you seriously, but if a trade union represents the whole workforce of thousands of employees the business owners are much more likely to listen.
If Trade Unions feel strongly enough that they are not being treated fairly they can go on strike, refusing to go to work until the situation is resolved.
However, if the business fails the trade union and workers will lose their jobs, so it’s always in their interests to find agreement with management.
It’s important to remember that Trade Unions don’t just negotiate pay, but can ensure a safe workplace, help with disputes between managers and employees and arrange social activities for members.
