Business at work

understand - staff know precisely where they are in the structure, who can allocate work to them and to whom they are responsible.

• Managers 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-established line authority makes it possible for work to be delegated further down the line - this can be valuable when superior is seeking to widen the experience subordinates and develop their management or supervisory skills.

Disadvantages:

• It can involve a very long chain of command - instructions may take a considerable time to filter from the top and impact on production, which can be an important drawback if the organisation operates in a rapidly changing market.

• The flow of information back up a long chain to management may be a lengthy process, causing a considerable delay before problems are identified and tackled.

• Individuals might only respond to requests from the superior, creating inflexibility in the organisation which may be totally unnecessary if co-operation with other managers does not effect working relations with their superior.

Line and staff structure

A line and staff structure combines both a line authority and what is known as staff authority. The term staff authority refers to those staff, usually at a relatively senior level, whose are of work often involves dealing with different departments. Someone with the relevant staff authority can provide services and advises to those in the line of authority of other departments. Managers with staff authority do not have the power to control or give instructions, but rather the authority to deal with different departments and to offer advice or support services in relation to problems or exploiting new opportunities. However, since those with staff authority are appointed because of their expertise, experience and good personal skills, their advice, though not binding, is likely to be very persuasive.

Advantages:

• Staff authority enables the expertise and experience of specialists to be utilised more fully across the organisation.

• By having access to all areas of the company, managers with staff authority, communications between departments are at director level, and so any inter-departmental communication has to pass up the chain of command in one department to director level and then down the other before it reaches the appropriate level.

• Staff authority prevents individual departments from being too inward looking - departments remain aware of their interdependence and their role in seeking to achieve the organisation’s objectives.

Disadvantages:

There is a risk that staff authority may diminish the authority of individuals in the line management, particularly if those with staff functions acquire informal power and authority.

Matrix structure

In a matrix structure, a senior manager heads a division or team of specialists drawn from different departments. These specialists are also located in departments where they are part of a line authority; they are therefore subject to two sources of authority.

In a matrix structure the simple chain of command found in a line structure is replaced by a very large number of reporting relationships as individuals report to managers in more than one department or function.

A matrix structure may be used for just some of an organisation’s activities or it may cover the whole work of the organisation. It is often used for organising and managing project teams, where people with specialist skills, perhaps from different levels in the hierarchy, are brought together to solve complex and urgent problems. Project teams may be created to deal with issues which arise every now and again or they may be an ongoing feature of the organisational structure.

Some aspects of marketing, however, may be handled by an ongoing project team drawn from other departments, although the membership of the group may change as different marketing issues arise.

Advantages:

• It promotes increased co-ordination between departments because it cuts across departmental boundaries - it encourages greater flexibility and creativity, produced by the cross-fertilisation of knowledge and skills.

• It allows for the involvement of relatively junior staff, giving them valuable experience in a wider field for the expression and application of their particular skills.

• Staff lower down a line structure can also gain valuable management development in a project team, preparing them for promotion to higher management positions.

• The involvement of specialists from different areas reduces the risk of resources

being wasted on projects with no future - in non-matrix structures an idea originating in, say, the marketing department may be pursued for a long time before it comes to the attention of production which might find that it is simply not practical.

Disadvantages:

• The existence of a matrix structure 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 instructions from managers based on other departments, especially if they are at a lower level of management.

• This also raises questions as to who has priority over the subordinate’s time and what information arising out of the work of the project team should also be reported through the line authority. This can be a potential source of conflict and relations may also be strained if the subordinate suffers from divided loyalty.

Centralised structure

Organisations are centralised when the majority of decisions are taken by a few people at the top of the organisation and little decision making is delegated to those further down the organisational structure.

Even if many important decisions are delegated to subordinates, some aspects of the business are always likely to remain totally under central control. In general, senior managers or a centralised department takes responsibilities for: major financial issues, wages and salaries, manpower planning and personnel records, purchasing.

Advantages:

• Senior management have more control of the business, eg budgets.

• Procedures, such as ordering and purchasing, can be standardised throughout the organisation, leading to economies of scale and lower costs.

• Senior managers should be more experienced and skilful in making decisions. In theory, centralised decisions by senior people should be of better quality than decentralised decisions made by others less experienced.

• In times of crisis, a business may need strong leadership by a central group of senior managers.

• Communication may improve if there are fewer decision makers.

Decentralised structure

Complete decentralisation would mean subordinates would have all the authority to take decisions. It is unlikely that any business operates in either of these ways. Even if authority is delegated to a subordinate, it is usual for the manager to retain responsibility.

Some delegation is necessary in all firms because of the limits to the amount of work senior managers can carry out. Tasks that might be delegated include staff selection, quality control, customer relations and purchasing and stock control. A greater degree of decentralisation - over and above the minimum which is essential - has a number of advantages.

Advantages:

• It empowers and motivates workers.

• It reduces the stress and burdens of senior management. It also frees time for managers to concentrate on more important tasks.

• It provides subordinates with greater job satisfaction by giving them more say in decision-making, which affects their work.

• Subordinates may have a better knowledge of ‘local’ conditions affecting their area of work. This should allow them to make more informed, well-judged choices.

• Delegation should allow greater flexibility and a quicker response to changes. If problems do not have to be referred to senior managers, decision-making will be quicker. Since decisions are quicker, they are easier to change in the light of unforeseen circumstances which may arise.

• By allowing delegated authority, management at middle and junior levels are groomed to take-over higher positions. They are given the experience of decision making when carrying out delegated tasks. Delegation is therefore important for management development.

Delayered structure

Delayering involves a business reducing its staff. The cuts are directed at particular levels of a business, such as managerial posts. Delayering involves removing some of these layers. This gives a flatter structure.

Delayering is likely to play a major role in a policy of decentralisation as the removal of management layers allows authority for decision making to be shifted to a lower level in the organisation.

Advantages:

• The savings made from laying off expensive managers. It may also lead to