Formal organisational structure of a business cont'd
Yvonne Harvey, Contributor

Hi. Did you remember to do your homework? I hope so. Below is the organisational structure you should have drawn. If yours does not look like this, I hope you will be able to see where you have gone wrong.

Notice that there are four levels; beginning with the first at the managing director and the fourth at the functional areas (chief accountant, marketing manager and production manager).

Let us move on to the functional organisational structure

(c) Here the basic functions of a business are separated into specialist departments. Each specialist supervises and controls different aspects and is therefore accountable to them for certain aspects of his or her work. Below is a chart representing functional organisation.

Notice that both workers receive instructions from each of the four functional areas.

Advantages of the functional organisation

1. The business benefits from the advantages of specialisation, including increased output and increased skill of workers.

2. It allows management more time to plan since they have less duties to perform.

Disadvantages of the functional organisation

1. Subordinates tend to have too many 'bosses' to report to and this creates confusion.

2. The decision-making process is delayed because of the additional functional levels of authority.

3. Authority is not clearly defined, therefore discipline breaks down.

The final formal structure is the committee organisational structure.

(d) Committee organisation

As businesses expand, committees are formed to facilitate communication and interaction among workers at all levels. Committees are made up of specialists who advise the top executive and assists him in developing policy and procedures. There are two types of committees:

Ad hoc or temporary Committees

These are created to solve a particular problem or plan a certain event. They are dissolved after they have achieved their purposes or reached their goals.

Permanent or standing committees

These last as long as the business lasts. An example of this is a board of directors.

I will now leave you with your homework:

(a) Draw a chart to represent a committee organisation. (b) Outline the advantages and disadvantages of committee organisations.

These Wolmer's girls sing along with performers during an ISCF concert in their auditorium on April 4. - Anthony Minott/Freelance Photographer

Yvonne Harvey teaches at Glenmuir High School.