Organising (Leaving Cert Business): Revision Notes

Organising

What is organising?

Organising is a fundamental management activity that involves arranging human and physical resources in the most effective way possible to help an organisation achieve its goals. Think of it like creating a roadmap that shows everyone where they fit and how they contribute to the company's success.

When we talk about organising, we need to understand two key concepts:

Formal structure refers to the official way a company is organised. This includes clearly defined roles, responsibilities, and reporting relationships. You'll often see this displayed in an organisation chart - a visual diagram showing who reports to whom and how different departments connect.

Informal structures develop naturally over time within the formal structure. These emerge from workplace friendships, frequent teamwork, and personal relationships between employees. While not officially recognised, informal structures can significantly impact how work actually gets done.

Types of organisation structure

Companies can choose from four main types of organisation structures, each with distinct advantages and disadvantages. Many businesses use a combination of these structures depending on their needs.

Functional organisation structure

This is the most common type of structure, where the company is divided based on the main business functions like finance, marketing, production, and human resources. Each department has its own manager, and all departments report to the CEO or managing director.

For example, Kerry Group uses a functional structure with separate divisions for finance, operations, marketing, and human resources, each led by a specialist director.

Advantages:

• Expertise development: When employees work within one function, they become highly skilled specialists in their area
• Clear communication channels: The structure creates direct lines of communication from top to bottom
• Clear authority: Everyone knows exactly who they report to and what's expected of them

Disadvantages:

• Conflicting departmental goals: Departments might prioritise their own targets over company-wide objectives
• Slow communication between departments: Information sharing across functions can be delayed
• Poor teamwork: Limited interaction between different departments can harm collaboration

Product organisation structure

This structure divides the company based on different products or product lines. Each product division has its own management team covering all business functions like marketing, finance, and production.

Unilever Ireland operates this way with separate divisions for food products, personal care items, and home care products, each with their own management structure.

Advantages:

• Healthy competition: Different product divisions compete to perform better, boosting overall productivity
• Specialist product knowledge: Each division becomes expert in their specific product area
• Focused product development: Each unit can concentrate on developing and improving their particular products

Disadvantages:

• Unnecessary competition: Internal competition can sometimes become counterproductive
• Duplication of functions: Multiple divisions might have identical roles, increasing costs
• Loss of economies of scale: Smaller divisions may pay more for supplies than one large purchasing department would

Geographic organisation structure

This structure organises the company by geographical areas such as regions, countries, or continents. Each geographical unit has its own management team responsible for all business functions in that area.

For example, a major Irish retailer might have separate divisions for Dublin, Cork, and rural areas, each with their own regional managers overseeing local operations.

Advantages:

• Local market knowledge: Employees understand local customs, preferences, and legal requirements
• Healthy regional competition: Different regions compete to achieve better results
• Management development: Regional managers gain experience in all business areas

Disadvantages:

• Duplicated departments: Similar functions are repeated across different regions, increasing costs
• Management conflicts: Disagreements between regional managers and head office can affect operations
• Communication challenges: Poor communication between regions can lead to inconsistent practices

Matrix (team-based) organisation structure

This is a flexible structure that brings together employees from different departments to work on specific projects. Team members report both to their department manager and to a project manager.

Technology companies like those in Dublin's Silicon Docks often use matrix structures for software development projects, combining programmers, designers, and marketing specialists in project teams.

Advantages:

• Increased innovation: Mixing different expertise often generates creative solutions and synergy
• Enhanced motivation: Being selected for project teams makes employees feel valued
• Better decision making: Diverse teams bring wider perspectives to problem-solving

Disadvantages:

• Multiple reporting lines: Employees must answer to more than one manager, which can create confusion
• Potential conflicts: New teams may experience personality clashes or communication problems
• Slower decision making: Getting input from all team members can slow down the decision-making process

Key organising concepts

Chain of command

The chain of command shows the path through which instructions flow downward from management and feedback travels upward from employees. This creates clear lines of authority where each level has power over the levels below it.

For example, in a retail chain like Dunnes Stores, instructions might flow from head office to regional managers, then to store managers, and finally to shop floor staff.

Span of control

Span of control refers to how many employees report directly to one manager or supervisor. A manager with many direct reports has a wide span of control, while one with fewer direct reports has a narrow span of control.

Several factors influence whether a wide or narrow span of control works best:

• Manager experience: Experienced managers can usually handle more direct reports effectively
• Employee skills: Skilled workers need less supervision, allowing for wider spans of control
• Nature of work: Complex or high-risk tasks require closer supervision with narrower spans
• Location: Managing remote workers often requires more attention, suggesting narrower spans

Choosing an organisation structure

Companies must select the structure that best fits their specific circumstances and future plans. Three key factors influence this choice:

Companies sometimes need to change their structure to adapt to new circumstances like expanding into new markets or launching new products. When considering structural changes, organisations should ask:

• How much will this change cost?
• How will it affect employees throughout the company?
• Will employee roles change, and how can we help them prepare?
• Will the new structure maintain clear lines of authority?

Delayering

Delayering involves removing one or more management levels from the organisation structure. Companies typically eliminate middle management layers, though employees aren't necessarily made redundant - they might be promoted, relocated, or given new roles.

For example, a retail company might eliminate the "area manager" level, having shop managers report directly to regional managers instead.

Advantages of delayering:

• Faster communication through fewer hierarchy levels
• Reduced costs from fewer managerial salaries
• Improved customer contact as remaining managers work closer to customers
• Employee empowerment through increased authority and responsibility

Disadvantages of delayering:

• Lower employee morale due to job security fears
• Higher redundancy costs if positions are eliminated
• Increased workload for remaining managers with wider spans of control
• Operational disruption while employees adjust to new reporting structures

Benefits of organising

Effective organising provides numerous advantages for businesses:

Clear chain of command ensures everyone knows who to report to and where to seek help, leading to faster problem resolution.

Improved workplace communication creates efficient channels for information to flow both up and down the organisation, keeping everyone informed and engaged.

Enhanced efficiency and motivation results when employees understand their roles clearly and can see career advancement opportunities within the structure.

Appropriate span of control prevents managers from becoming overwhelmed while ensuring adequate supervision and support for all employees.