S 3 Business Management Unit 1 3

S 3 Business Management Unit 1. 3

DEFINITION OF AN ORGANISATION CHART An organisation chart “shows the structure of a business”

A TYPICAL ORGANISATION CHART

DEFINITION OF AUTHORITY Authority means “the power or ability to influence and control others”.

DEFINITION OF RESPONSIBILITY Responsibility means “ the duty an employee has to carry out their work”

WHAT IS SHOWN BY AN ORGANISATION CHART? 1. Management structure and 2. 3. 4. 5. 6. 7. main departments Lines of responsibility Lines of authority Lines of communication Positions of employees including names, job titles Reporting structure Number of people who are accountable to each manager

DEFINITION OF ACCOUNTABLE Accountable means “being responsible to someone i. e manager for some action taken”

WHO USES AN ORGANISATION CHART? • Visitors to the organisation • New members of staff • Existing members of staff • Receptionist

ADVANTAGES & DISADVANTAGES OF ORGANISATION CHARTS Advantages: • Visitors - see the size of the organisation and where each person fits in. • New staff - find out about other staff in their department and the whole organisation • Existing staff - can see staff in each department and who to contact. Disadvantage: • Becomes out of date quickly as staff may leave, new staff join and/or existing staff get promoted.

Advantages of An Organisation Chart to Employees • Can immediately see the overall size and structure of the organisation (how the various sections are grouped and the main areas of work of departments/sections). • Can see at a glance the reporting structures and lines of communication within the organisation • Can see the number of people who are accountable to each senior manager • Can immediately see the relationship of the departments and managers within the org. • Are made aware of the range of activities undertaken by the organisation.

What is the usual shape of an organisation chart? • An organisation chart is usually shaped like a pyramid with a few senior or high status posts at the top of the pyramid, with a greater number of lower status posts at each levels below. In a pyramid (or hierarchical) structure, posts with the same level of authority/responsibility are shown on the same level. Chief Exec Directors Senior Managers Junior Managers Supervisors Assistants

Organisational Structures • A pyramid structure with many levels of posts is known as a tall structure. In recent years there has been a move towards removing certain levels of management posts (known as delayering). This has resulted in flatter structures. Delayering an organisation will lead to more posts at each of the remaining levels.

Features of a Tall Structure (Pyramid) • There are usually many levels of management • Managers will usually have narrow spans of control • Management posts tend to be specialised

Advantages of a Tall Structure • It should be easier for managers to supervise staff • There are likely to be many opportunities for promotion • Employees are more likely to know their immediate boss • Employees are more likely to know the scope of their duties and responsibilities

Disadvantages of a Tall Structure • Employees feel undervalued and far removed from the real decision-making • Employees may not get the opportunity to suggest ideas and show initiative • Decision-making may be slow • It may take time to communicate decisions throughout the organisation • The management structure may be costly with many levels of highly-paid posts • May lead to complicated channels of communication with very formal procedures

Features of a Flat Structure • Fewer layers of management • More modern structure • Usually as a result of delayering

• • • Advantages of a Flat Structure more authority and Employees are given responsibility - they are likely to feel more motivated. Employees are more likely to be able to show initiative Employees are more likely to be less complicated and less formal - communication is less likely to be more efficient Should take less time to reach decisions and for the organisation to react to situations Should take less time to communicate decisions throughout the organisation

Disadvantages of a Flat Structure • Workloads of employees are likely to increase - possibility of stress • Employees may need training to carry out new/wider responsibilities • Where the span of control is too wide, employees may feel isolated or ignored • Employees may not be able to meet with their line manager on a regular basis • Likely to be fewer opportunities for promotion to management posts

What are the main types of relationship within an organisation? • There are 2 main types of relationship within an organisation: • Line Relationship • Lateral Relationship

Line Relationship • These exist between line managers and the staff immediately below them. Members of staff are accountable to their line manager for any actions or decisions they take. Line relationships are shown by the vertical lines on an organisation chart and stretch down through the whole organisation.

Lateral Relationship • These exist between employees who are on the same level and who report to the same line manager. The employees cannot give instructions to each other or to staff outwith their own spans of control.

Marketing - Unit 1. 3 SG Business Management

What is marketing? • Marketing is the process of learning about your customers and competitors, so that you can provide the right products at the right price in the right place, promoted in the right way to achieve your business objectives.

Marketing involves the following range of activities: • Knowing about the product or service and its market • Knowing what to produce • Knowing how much to charge • Knowing how to persuade people to buy it • Knowing where to sell it • Knowing how to get the best mix of these • Knowing how to deal with customers

The Marketing Mix: • Product • Price • Promotion • Place

What is market research? • Market research gathers information about consumers, competitors and distributors wihtin a firm’s target market. It is a way of identifying consumers’ buying habits and attitudes to current and future products. • Market research can be numerical (such as what proportion of 16 -24 year olds by The Sun every day? ) or psychological (why do they buy The Sun).

How is market research carried out? • The following research techniques are commonly used: - Desk Research - Field Research

Desk Research • Desk research involves the use of existing information from: - government statistics, for example from the Census which is carried out every 10 years: • Newspapers • Magazines • Published market research information – reports in various journals showing trends in a range of markets for different products.

When should Desk Research be used? • When market information already exists. • When it is cheaper to access existing information rather than generate new information. • When it is easier to access – saves time.

Field Research • Field Research can be carried out through: - the use of questionnaires – set questions are asked, face-to-face/by telephone/by post. - Test Marketing – try out the product on a small section of the market - Consumer panel – a group of people are given a product and asked to comment on it in detail.

Field research is undertaken when: • Information is to be gathered for a specific purpose. • Information is to be linked directly to a product/service. • Research is to be focused on a particular company’s needs.