Chapter 2
organisation structure
Chapter learning objectives
Upon completion of this chapter you will be able to:
§ explain the different ways in which an organisation might be structured
§ list advantages and disadvantages of each type of organizational arrangement
§ define the terms scalar chain and span of control
§ what factors influence the span of control
§ give reasons why ownership and management of the organisation are often separated
§ explain what is meant by centralised/decentralised structure
§ what are the advantages and disadvantages of the informal organisation
§ identify what impact the informal organisation has on the business
§ how can managers foster the benefits of the informal organization while at the same time reducing its potential disadvantages.
1 Organisational structure
1.1 Different types of structure
A typical pattern of structure change can be represented by the following sequence.
Entrepreneurial
§ This type of structure is built around the owner manager and is typical of small companies in the early stages of their development.
§ The entrepreneur often has specialist knowledge of the product or service
§ Example owner/managed business
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