iGCSE Business Studies

2.2.1 Organisation Charts

Learning Outcomes
Draw, Interpret and understand simple
organisational charts
Understand the features of simple hierarchical
structures:
Span of control
Hierarchy
Chain of command
Roles, Responsibilities and inter-relationships
between people in organisations

Organisational Structure
Refers to the ways that businesses organise their
human resources (employees)
As businesses grow there is a growing need for
the structure to be formalised

What is meant by a Hierarchy?

Central Question
What is the
best way to
structure
your
business?

Formal Versus Informal

Structures

What do you think these terms

mean..
Hierarchy
Chain of command
Span of control
Delegation
-Subordinate
Line Manager

Key Term: Hierarchy

Pay and Authority

Senior
management
Middle
management
Junior
management

CEO/MD
Board of Directors
Management
Supervisors
Other Employees (Operatives)

Key Term: Chain of Command

Headteacher
Deputy Heads
Heads of Faculty
Heads of Department
Teaching Staff

Chain of command: The way authority

and power are passed down in the
business - Who is responsible to whom?

Key Term: Span of Control

Span of control: The number of
subordinates directly reporting to a
superior

Tall hierarchy
Narrow span of control
Tight supervision and control

Short hierarchy
Wide span of control
Freedom for subordinates
Lower cost

Key Term: Organisation Chart

Managing Director

Identify the span of control of:

the Managing Director
the Purchasing Manager

Would you describe this as a wide or a

narrow hierarchy?

Task Based on this Pastoral chart,

can you draw a curriculum chart

Homework Task
Describe the Organisation Structure of BSM.
Make sure you use the words:
Span of Control
Chain of Command

Task Sinbad Plc

Using the information from the sheet draw an
organisational chart for Sinbad Plc

Key Term: Delegation

Refers to passing authority & control on to
others. Manager retains responsibility, but
the subordinate does the work.
What are the benefits of delegation?

Benefits of Delegation

Why might a manager

be reluctant to
delegate?

Key Terms: Centralisation and

decentralisation
Centralisation: Retaining control within
the top levels of the hierarchy at head
office
Decentralisation: Delegating authority
down
the hierarchy
Centralisation

Retains tight control at the

top of the organisation
Employees are not able to
show flair and initiative

Decentralisation
Motivates employees by
giving them more freedom
and responsibility
Employees may not have
the experience/training to
carry out tasks effectively

Would you rather work in an organisation that was centralised or

decentralised?