Chapter 2 Overview

Internal environment of large-scale organisations

Understand the role of management in

ensuring that the internal environment of an organisation enables it to meet its objectives

This includes creating and maintaining a positive corporate culture and managing the organisation ethically and with social responsibility

Learning Objectives

Internal environment includes the factors

inside an organisation that has a direct impact on its performance such as organisational structure, policies, corporate culture, the role of management and the performance of all staff. (page 45)

Organisational (or management) structure refers to the way an organisation formally arranges its staff and resources so that it can achieve its objectives. Most organisations will display their management structure in an organisational chart. (page 46)

Key Terms

Organisational chart shows the key

positions of responsibility and accountability, and how information is communicated within the organisation

Key Terms

The Pyramid on page 46 shows a traditional

management hierarchy It consists of different management levels,

and shows the job titles/positions and responsibilities associated with each management level

Hierarchical management

structure

There is greater authority, responsibility and

accountability at the higher levels of the structure

So senior managers have the most power and responsibility and lower level managers have less

There are many levels of management Communication flows from top to bottom, with

little flexibility Positions, roles and responsibilities are clear

and identifiable

Features of traditional management

structures

Chain of command or line authority shows

who is directly responsible to whom. Under the principle of unity of command, each employee takes orders from one supervisor only

Advantage: only one person is ultimately in charge – this makes it clear and reduces confusion

Span of control the number of employees a manager is directly responsible for

Key features of a management

hierarchy

The process of setting objectives

and deciding the methods used to achieve them

This is the PRIMARY ROLE OF MANAGEMENT

There are different levels of Planning

Management roles: PLANNING

Long-term Usually 3-5 years Helps determine where the organisation wants

to be within the market and what it wants to achieve in relation to its competitors

Strategic Planning

Medium-term Usually 1-2 years This is flexible, adaptable planning and

therefore allows the organisation to respond quickly to change

It helps to implement the strategic plan

Tactical Planning

Short-term Usually day-to-day Provides specific details of how the

organisation will operate, e.g. daily and weekly production schedules

Operational Planning

SWOT