Organisation and Management
This chapter explains how businesses organise people and responsibilities, how authority flows through a hierarchy, what managers do, how delegation and leadership affect workers, and why trade unions matter to employees and employers.
Topic 1: Organisational Structure and Organisation Charts
Students should first understand how a business divides responsibilities and shows authority clearly.
1. Organisational Structure
🏢Organisational structure
Organisational structure refers to the levels of management and the division of responsibilities within a business.
📊Organisational chart
An organisational chart is a diagram showing the internal management structure of a business.
⬆️Hierarchy
A hierarchy is the different levels of management in an organisation, from the highest to the lowest.
2. Why Organisational Structure Becomes Important
As a business grows:
- more employees are recruited
- responsibilities need to be divided
- managers need to know who they supervise
- employees need to know who they report to.
3. Organisation Charts
An organisation chart shows:
- different levels of hierarchy
- departments
- who reports to whom
- lines of authority.
Main benefits
1. Accountability
Employees know who they are accountable to.
2. Authority
Employees know who has authority over them.
3. Department links
It shows the relationship between different departments.
Topic 2: Chain of Command, Span of Control and Business Structure
This topic explains how instructions move through the business and why structures may be tall, flat or delayered.
4. Chain of Command
Example
5. Span of Control
Narrow Span of Control
A manager supervises only a few employees.
Usually associated with:
- more levels of hierarchy
- a longer chain of command
- a tall organisational structure.
Wide Span of Control
A manager supervises many employees.
Usually associated with:
- fewer management levels
- a shorter chain of command
- a wide/flatter organisational structure.
6. Tall and Flat Organisational Structures
Tall Structure
A tall structure has:
- many levels of hierarchy
- long chain of command
- narrow spans of control.
Flat Structure
A flat structure has:
- fewer levels of hierarchy
- shorter chain of command
- wider spans of control.
- Communication can be quicker.
- Senior managers are closer to employees.
- Employees may be given more responsibility.
7. Delayering
This creates:
- a shorter chain of command
- wider spans of control
- a flatter organisational structure.
8. Roles in an Organisation
Directors
Senior managers responsible for a department or division.
Line Managers
Managers who have direct responsibility for employees below them.
Supervisors
Junior managers who directly control and monitor workers.
Staff Managers
Specialists who provide advice and support to other managers.
Examples may include specialists in IT, Human Resources and economic forecasting.
Topic 3: Functions of Management
Managers perform five important functions. The memory aid is P - O - C - C - C.
9. Functions of Management
Managers perform five important functions:
10. Planning
Planning involves setting objectives and deciding how they will be achieved.
Managers also need to decide:
- what resources are required
- what actions need to be taken.
11. Organising
Organising means arranging:
- employees
- tasks
- resources
so that business objectives can be achieved.
Managers must also decide who should perform particular tasks.
12. Coordinating
Coordinating means making sure different departments and employees work together.
13. Commanding
Commanding involves:
- giving instructions
- guiding employees
- supervising workers
- making sure tasks are completed.
Managers must ensure employees meet targets and deadlines.
14. Controlling
Controlling involves measuring actual performance against targets.
If performance is below the target, managers need to:
- identify the reason
- take corrective action.
Topic 4: Delegation and Leadership
This topic explains how managers pass authority to subordinates and choose suitable leadership styles.
15. Delegation
Benefits of delegation
1. More time for managers
Managers have more time for important tasks.
2. Improved motivation
Employees feel trusted, which may improve motivation.
3. Employee development
Employees develop skills and may be prepared for promotion.
Why some managers may not delegate
- They fear employees may make mistakes.
- They may not want to lose control.
16. Leadership
A good leader should be able to:
- motivate employees
- guide employees
- make effective use of resources
- help the business achieve its objectives.
The three main leadership styles are:
17. Autocratic Leadership
Communication is mainly top-down.
Decisions can be made quickly.
Employees have little involvement, which may reduce motivation.
Suitable when
- quick decisions are required
- there is a crisis
- employees require close supervision.
18. Democratic Leadership
Communication is:
- top-down
- bottom-up.
Employees can contribute ideas and may feel more motivated.
Decision-making may be slower.
Suitable when
- employees are skilled or experienced
- their ideas could improve decisions.
19. Laissez-faire Leadership
Encourages creativity and responsibility.
Lack of clear direction can create problems.
Suitable when
- employees are highly skilled
- creative or specialist work is being carried out.
20. Choosing a Leadership Style
There is no one best leadership style.
The most suitable style depends on:
- the type of employees
- their skills and experience
- the type of decision
- how quickly a decision is needed.
Topic 5: Trade Unions
Trade unions give employees a collective voice and can affect both workers and employers.
21. Trade Unions
Employees may join a trade union because they want:
- higher pay
- better working conditions
- fair treatment
- greater job security.
22. Benefits of Trade Union Membership
Three important benefits are:
1. Strength in numbers
Workers can negotiate collectively with employers.
2. Better pay and working conditions
Trade unions may negotiate improvements in wages, working hours, holidays and health and safety.
3. Support for employees
Unions may provide advice and support when workers believe they have been unfairly dismissed, made redundant unfairly or treated unfairly.
23. Disadvantages of Trade Union Membership
For employees
- membership requires payment of a fee
- members may be asked to take industrial action even when they do not personally agree.
24. Trade Unions and Employers
Trade unions can affect employers positively and negatively.
Trade unions can make communication and negotiation with employees easier.
Trade unions may demand higher wages, increasing business costs, and organise strikes if agreements cannot be reached.
Topic 6: Key Definitions and Examination Checklist
Use this section for quick revision before answering exam-style questions.
Key Definitions
| Term | Meaning |
|---|---|
| Organisational structure | Levels of management and division of responsibilities in a business |
| Organisational chart | Diagram showing the internal management structure |
| Hierarchy | Different levels of management |
| Chain of command | Route through which authority and instructions pass down an organisation |
| Span of control | Number of subordinates directly supervised by a manager |
| Delegation | Giving a subordinate authority to perform a task |
| Autocratic leadership | Manager makes decisions and expects instructions to be followed |
| Democratic leadership | Employees are involved in decision-making |
| Laissez-faire leadership | Employees are given freedom to organise their own work |
| Trade union | Group of employees formed to protect their interests |
What Students Must Know for the Examination
Students should be able to:
- draw and interpret simple organisation charts
- understand hierarchy, chain of command and span of control
- distinguish between tall and flat structures
- explain the main roles of directors, managers and supervisors
- explain the five functions of management
- explain the importance of delegation
- distinguish between autocratic, democratic and laissez-faire leadership
- recommend an appropriate leadership style for a particular situation
- define a trade union
- explain important benefits and disadvantages of trade union membership.