Unit 1a

Organisation of Departments

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Learning Outcomes Introduction to Organisations Introduction to Organisation Charts

Caledonian Health & Fitness Organisation Chart

Lines of Responsibility

Lines of Authority

Lines of Communication Relationships within an Organisation

The Chain of Command

Benefits and Costs of an Organisation Chart

Types of Organisational Structure

Change of Organisational Structure

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In order for a business to SURVIVE it must be:

ORGANISED and have GOOD COMMUNICATIONS

This will enable it to GROW and become more successful

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What is an Organisation Chart?

An organisation chart is used to provide a ‘picture’ of who is in the business.

It is used to show the STRUCTURE of the business.

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What Information do Organisation Charts Show?

Organisation charts are used to show the following:

– Lines of RESPONSIBILITY (who you will look after; be responsible for)

– Lines of AUTHORITY (the way in which instructions are passed down)

– Lines of COMMUNICATION (the way in which information is passed throughout the organisation)

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Mr Burns

Managing Director

Mr B Wallace

Personnel Manager

Mrs A MacDonald

Sales/Marketing Manager

Miss J Montrose

Purchases Manager

Mr H Nichols

Buyer

Mrs L McKenna

Finance Manager

Mr N Millar

Admin Manager

Mr Ray Cruit

Recruitment Officer

Miss T Raynor

Training Officer

Mrs R Ambleon

Marketing Assistant

Mr V Smart

Sales Rep

Mr B Goodman

Wages Officer

Miss H Munro

Admin Assistant

Caledonian Health & Fitness 12

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Mrs R Ambleon

Marketing Assistant

Mrs A MacDonald

Sales/Marketing Manager

Mr V Smart

Sales Rep

Lines of Responsibility The lines of responsibility show

WHO exactly is in charge of others.

The example above shows that Mrs MacDonald The example above shows that Mrs MacDonald is is in charge of all the work that is carried out by in charge of all the work that is carried out by

both Mrs Ambleon and Mr Smart both Mrs Ambleon and Mr Smart

Mrs MacDonald is their LINE MANAGERMrs MacDonald is their LINE MANAGER

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Lines of Authority

In an organisation chart the lines of authority show us who gives instructions to others so that they carry out certain tasks

The person who gives you direct instructions is called your LINE MANAGER i.e the person who you report to

What was the first thing your teacher asked you What was the first thing your teacher asked you to do when you entered the class today? (Sit to do when you entered the class today? (Sit

down quietly? Get your resource book out down quietly? Get your resource book out quickly? Hand in your homework?)quickly? Hand in your homework?)

Your teacher gives you instructions to enable Your teacher gives you instructions to enable you to get ready to learn and to get the most you to get ready to learn and to get the most

out of the lesson.out of the lesson.

The example here The example here shows that Mr Burns shows that Mr Burns gives Mr Wallace gives Mr Wallace instructions on how he instructions on how he wants the Personnel wants the Personnel Department to operateDepartment to operate

Mr R Burns

Managing Director

Mr B Wallace

Personnel Director

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Lines of Communication

Mr Burns is considering buying new equipment for the gymnasiums and has asked Mr Nichols to find the best supplier.

Having carried out his research, Mr Nichols finds a new supplier offering amazing discounts.

Should Mr Nichols go ahead and order from the new supplier?

In order for information to be communicated In order for information to be communicated effectively it is important that information effectively it is important that information

flows flows UPUP and and DOWNDOWN throughout the throughout the organisation.organisation.

This is key to allowing good decision-making.This is key to allowing good decision-making.

In which direction should In which direction should information flow?information flow?

Mr H Nichols

Buyer

Miss J Montrose

Purchases Manager

Mr R Burns

Managing Director

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Copy Caledonian Health & Fitness’ Organisation Chart into your jotter and answer the following questions

1) List the people who work in the Sales/Marketing Department.

2) Who is Mr Nichols’ line manager?

3) Mrs Ambleon has been asked to design a leaflet to recruit new members. She is considering promoting a special offer however is unsure how much discount to give. Mrs A MacDonald is out at a meeting – who should Mrs Ambleon report to?

4) Mr Burns recently purchased new software to enable customer records to be stored more efficiently however is aware that staff will need training.

Who should Mr Burns speak to first regarding the training program?

Who will be responsible for the training program? Justify your answer?

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Solutions1) List the people who work in the Sales/Marketing Department.

Mrs A MacDonald; Mrs R Ambleon; and, Mr V Smart

2) Who is Mr Nichols’ line manager?Miss J Montrose, Purchases Manager

3) Mrs Ambleon has been asked to design a leaflet to recruit new members. She is considering promoting a special offer however is unsure how much discount to give. Mrs A MacDonald is out at a meeting – who should Mrs Ambleon report to?Mr R Burns, Managing Director

4) Mr Burns recently purchased new software to enable customer records to be stored more efficiently however is aware that staff will need training.

Who should Mr Burns speak to first regarding the training program? Mr B Wallace, Personnel Manager

Who will be responsible for the training program? Justify your answer?Mr R Cruit as he is responsible for delivering the training programs to all the members of staff and recording their level of progress

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Relationships within Departments LINE RELATIONSHIP

– Relationship between managers and the staff directly below them

LATERAL RELATIONSHIP– Relationship between people on the same

level who report to the same Line Manager

Identify the LINE and LATERAL relationships which exist at Caledonian Health & Fitness

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Solutions LINE RELATIONSHIPS

– Mr Burns and Mr Wallace– Mr Burns and Mrs MacDonald– Mr Burns and Miss Montrose– Mr Burns and Mrs McKenna– Mr Burns and Mr Millar– Mr Wallace and Mr Ray Cruit– Mr Wallace and Miss T

Raynor– Mrs MacDonald and Mrs

Ambleon– Mrs MacDonald and Mr V

Smart– Miss Montrose and Mr

Nichols– Mrs McKenna and Mr

Goodman– Mr Millar and Miss Munro

LATERAL RELATIONSHIPS– Every Manager has a lateral

relationship with one another– Mr Ray Cruit and Miss T Raynor– Mrs Ambleon and Mr Smart

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What is the CHAIN OF COMMAND?

The CHAIN OF COMMAND is the way in which instructions are passed down

through each level in the organisation.

Mr R Burns

Managing Director

Miss J Montrose

Purchases Manager

Mr H Nichols

Buyer

Mr Burns is unhappy with the current supplier of the Gym equipment as he feels the quality of the equipment is poor.WHO DOES MR BURNS CONTACT TO DISCUSS THIS ISSUE?

Mr Burns informs Miss Montrose that a new supplier needs to be found

WHO DOES MISS MONTROSE CONTACT TO DISCUSS THIS ISSUE?

Miss Montrose explains to Mr Nichols that he must find a better supplier – one which is reliable and offers high quality products

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Activities

Complete the following tasks in your activities booklet:– Question 1: What is an organisation chart?– Question 2: The Power & Light Company– Question 3: Identifying relationships in an

organisation– Question 4: Constructing an organisation chart

GROUP ACTIVITY– Create an organisation chart of your Admin

class! You could pick names out of a hat to decide roles and job titles. Who can come up with a creative name for your company?

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Who would find an Organisation Chart useful?

VISITORS to the organisation (gives them an overall impression of the size and structure of the business and they are able to identify who they wish to see)

NEW MEMBERS OF STAFF (able to identify who they will be reporting to and working alongside)

RECEPTIONIST (useful in assisting visitors to the correct department etc)

As the new Administration As the new Administration Assistant I was pleased to be Assistant I was pleased to be

given a copy of the given a copy of the organisation chart as it helped organisation chart as it helped me to learn the names of other me to learn the names of other colleagues and to know where colleagues and to know where

to find themto find them

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Advantages & Disadvantages of using an

Organisation Chart

Able to see the overall size of the organisation

Visitors can identify who it is they are going to meet with

Employees are able to see who they are going to be working with and reporting to

Can be very expensive to maintain – if new employees join the business or if current employees leave, then a new chart needs to be created

There may not be enough information on the chart eg. Is there a phone extension number? Is there a photo of the employee? Is there a room number?

ADVANTAGES DISADVANTAGES

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Activities

Complete the following tasks in your activities booklet:– Question 5: Word bank– Question 6: identify

features of an organisation chart

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Types of Organisational Structures

There are two main types of organisational structures:

TALLFLAT

FEW levels of management

MANY levels of

management

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What is a TALL Structure?

A Tall structure has many levels of management.

There can be a feeling in this type of organisation that there are ‘too many bosses’!

Tends to be seen in larger organisations eg. Civil Service; Hospitals; Universities; Armed Forces etc

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A Tall Structure

How many levels are in this structure? 1

2

3

4

5

6

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For those employees who work on level 8 there are many opportunities for promotion.

There are many lines of communication which means that before a decision can be made many people have to share their ideas. This can take a very long time.

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What is a FLAT Structure?

A Flat structure has fewer levels of management.

Employees are given GREATER RESPONSIBILITY as managers have to DELEGATE tasks to reduce their own workload.

Egs IBM; Virgin Group; Royal Bank of Scotland; etc

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A Flat Structure

There are fewer lines of Communication which results in DECISION-MAKING BEING VERY FAST – able to respond to changes quickly.

How many levels are in this structure?

1

2

3

4

Employees feel more valued and are more motivated to work.

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Change of Organisational Structure

Businesses may decide to change their structure for a number of reasons:

– To GROW – employ more staff; introduce new products/services etc

– To DOWNSIZE – take away some of its activities

– To DELAYER – get rid of a few levels of management in order to cut costs

– To OUTSOURCE – this means asking other businesses to come in and do certain tasks for you because they are more skilled eg. School giving the canteen to an outside caterer to provide the meals.

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Activities

Complete the following tasks in your activities booklet:– Question 7: Advantages and

disadvantages of a Tall structure– Question 8: Advantages and

disadvantages of a Flat structure– Question 9: Key terms– Question 10: Effects of growth

on an organisation chart