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Organisational Structures. BTEC Business. Why Have a Structure?. All businesses have to organise what they do A clear structure makes it easier to see which part of the business does what There are many ways to structure a business. Some Key Terms. Flat or tall structure Span of control

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Presentation Transcript
why have a structure
Why Have a Structure?
  • All businesses have to organise what they do
  • A clear structure makes it easier to see which part of the business does what
  • There are many ways to structure a business
some key terms
Some Key Terms
  • Flat or tall structure
  • Span of control
  • Chain of command
  • Hierarchy
  • Delegation
  • Empowerment
ways to structure a business
Ways to Structure a Business
  • By function: arranging the business according to what each section or department does
  • By product or activity: organising according to the different products made
  • By area: geographical or regional structure
ways to structure a business1
Ways to Structure a Business
  • By customer: where different customer groups have different needs
  • By process: where products have to go through stages as they are made
  • What are the advantages/disadvantages of different types of business structure?
pros and cons of different structures
Pros and Cons of Different Structures
  • This depends on the business type, size and structure used
  • Let’s look at a functional structure:

Chief Executive

Board of Directors






functional structure

Specialisation – each department focuses on its own work

Accountability – someone is responsible for the section

Clarity – know your and others’ roles


Closed communication could lead to lack of focus

Departments can become resistant to change

Coordination may take too long

Gap between top and bottom

Functional Structure
an example of organisation by product activity
An Example of Organisation by Product/Activity

Hewlett Packard

Imaging and

Printing Group


Systems Group


Systems Group

HP Services

HP Financial


organisation by product activity

Clear focus on market segment helps meet customers’ needs

Positive competition between divisions

Better control as each division can act as separate profit centre


Duplication of functions (e.g. different sales force for each division)

Negative effects of competition

Lack of central control over each separate division

Organisation by Product/Activity
organisation by area

Organisation by Area

Hewlett Packard

Hewlett-Packard’s Headquarters Worldwide


Houston, Texas

Europe, Middle East, Africa

Geneva, Switzerland

Asia Pacific

Hong Kong

organisation by area1

Serve local needs better

Positive competition

More effective communication between firm and local customers


Conflict between local and central management

Duplication of resources and functions

Organisation by Area
other organisational structures
Other Organisational Structures
  • By Customer:

Similar effects to structuring by product

  • By Process:

Similar to structuring by function

organisational structures1
Organisational Structures
  • Now go to the Activity for more……