When setting up a business you need to carefully think about your organisational structure. A Drucker says "Good organisational structure does not by itself produce good performance. But poor organisational structure makes good performance impossible, no matter how good the individual managers may be. To improve organisational structure... will therefore improve performance." (Drucker,P,F,1989) Drucker is basically saying that without good organisational structure the company will not be able to succeed. This is why it is so important to a business to have the correct organisational structure. The size of the company will affect what organisational structure it has. The span of control in a business can either be wide or narrow this is the ratio of managers to employees if it is a lot of employees to one manager this is a wide span and if it is a small amount of employees to the manager this is called a narrow span. The most common organisational structures are: Tall Structure:
Tall- "In its simplest form a tall organisation has many levels of management and supervision. There is a “long chain of command” running from the top of the organisation e.g. Chief Executive down to the bottom of the organisation e.g. shop floor worker."(Management2,2012) Using a tall structure means that the span is narrow and the staff can see a clear path to the top of the organisation which will be motivating which is a very big positive in a company. However the tall structure means narrowness which means there are more manager to staff. The staff also do not have many responsibilities which could be demotivating and lead the employees to be less innovative as they feel they have no power. Also the communication in tall structures is poor as there are too many levels to go through before you can get to the top and by the time your question or idea gets to the top of the company it may have been passed through several different people and changed "Chinese whispers" effect. There is also another type of structure which is called a flat structure "This means that the “Chain of Command” from top to bottom is short and the “span of control is wide”(Management2,2012) advantage to this are that there will be a lot of team spirit as ever one is on the same level however having this style of structure could hinder the company’s chances of expanding. Decision making in a flat structure would be quick as there are not many level this would be good for innovation because all ideas would be heard as more than likely the boss may also be your manager. Flat structure :
Having a flat structure would work better for a small company so maybe when you first set up in business it would be good to have a flat structure which i believe is better for innovation however what happens when the company expands because i feel the tall structure is suited to the authoritarian way of management which is not what i feel is best for innovation. The method that i feel is best in a large business is hierarchical "In a hierarchical organisation employees are ranked at various levels within the organisation, each level is one above the other. At each stage in the chain,
one person has a number of workers directly under them, within their span of control."(management2,2012) the hierarchal structure clearly defines each employee’s role which is motivating for the employee. The hierarchical style of structure incorporates both a narrow span at the top of the structure and as it works its way down becomes a wider span. A big advantage to this structure is that responsibilities are clearly defined and there is a clear path way to promotion.
I suppose it depends on your business what organisational structure you pick but it has to be the right one to suit you. No matter what structure is picked there needs to be a clear way of employees being able to give innovative ideas straight to the head of the business. So in a flat structure this would be easy they could have a meeting or just speak in the office. However in a tall structure the staff need to have something like a suggestion box for ideas and then regular feedback on what is happening with their ideas.
Hierarchical structure:
Drucker, P,F (1989). The Practise of management. : Heinemann Professional. p223
Learn management2. (2012). Organisational structures: Introduction. Available: http://www.learnmanagement2.com/organisational%20structures.htm. Last accessed 18th January 2012.
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