Organisational structures of a business - part 1
Yvonne Harvey, Contributor

Hello friends. The world of business is broad, having many faces. One of the many things to consider as we look at business is their organisational structure.

The term organisational structure refers to inter-personal relationships, both formal and informal, existing between people working together in order to achieve goals.

The formal relationships can be illustrated using charts and diagrams. A chart is a pictorial or diagrammatic representation of the structure of a business and the reporting relationships within a business.

Over the next few weeks, we will study these formal and informal relationships. We will also discuss the reasons for organisational charts and consider how to draw and interpret charts.

This lesson will continue by discussing some concepts that are fundamental to your understanding or organisational structures.

Hierarchy

This term refers to the authority and responsibility in a business.

Authority

Authority refers to one's ability to direct, delegate and command the activities of others. This line or chain of command flows from a higher authority to a lower status.

Responsibility

This means one's ability to accept directions and carry out tasks assigned by others.

Span of control

Span of control refers to the number of subordinates under one individual's control or jurisdiction. Span of control can also be referred to as span of management. It may be narrow or wide. The span of control is narrow if an individual has a few subordinates beneath him/her. If there is a need for close supervision, the span of control will likely be narrow. In the blank chart above, the most senior person (the person at the top of the chart) has a narrow span of control since he/she has direct control over only two subordinates.

If the individual has quite a number of subordinates directly beneath him/her, say 10-30 perhaps, the span of control is said to be wide. A wide span of control may exist if workers do not need close supervision.
The span of control indicated above is relatively wide. The span of control of a business usually narrows as we move up the chart. It is easier to supervise individuals where there is a wide span of control, and they are all engaged in the same activities, as opposed to where there is a narrow span of control and the few persons are engaged in different tasks.

Communication

This is the act of transmitting information or giving instructions. Communications may take place, for instance, between two departments on the same line or level, e.g., between the marketing head and the head of finance. Departments that communicate and exist on the same level enjoy what is called a lateral relationship. Lines of communication are also established up and down the chains of command. Broadly speaking, there are three major methods of communication - oral, written and visual.

Next week, I will discuss the first formal structure. This is known as LINE of DIRECT organisation. You may find it useful to so some reading in preparation for this lesson. Bye for now.

Convent of Mercy (Alpha) Academy athletes Lexanne Morgan (left), Shennelle Morgan (centre) and Sue-Ann Eddie strike a pose as they were about to warm-up on the Stadium East track on the third and penultimate day of the Inter-secondary Schools' Sports Association/GraceKennedy Boys' and Girls' Athletic Championships at the National Stadium on March 14. - Anthony Minott/Freelance Photographer

Yvonne Harvey teaches at Glenmuir High School.