IB Business Management HL

2.2 – Organizational Structure | Human Resource Management | IB Business Management HL

1 month ago
1 mins
34 Views

Unit 2 – Human Resource Management
2.2 – Organizational Structure

Overview: Organizational structure defines how activities such as task allocation, supervision, and coordination are directed toward achieving organizational aims. Good structure enables effective communication, decision-making, and accountability.

Types of Organizational Structures

Common Structures:

  • Hierarchical: Traditional “tall” structure with many management levels. Clear chain of command, narrow span of control.
  • Flat (horizontal): Fewer levels, managers have wider span of control. Faster communication, more empowerment.
  • Matrix: Combines functional and project/division lines. Employees have dual reporting (e.g., to project manager and department manager).
  • Functional: Organized by specialist area (e.g., marketing, HR, production).
  • Divisional: Split by product, market, or geography (e.g., Asia/EU, Consumer/Business division).
  • Project-based: Temporary teams assembled for a specific project, then disbanded.
Key ideas:
  • Span of control: Number of subordinates managed directly by one supervisor.
  • Chain of command: Path instructions must follow through hierarchy.
  • Delegation: Empowering others by assigning responsibility.
  • Centralization/Decentralization: Where most decisions are made—at the top (centralized) or throughout the firm (decentralized).

Types of Organization Charts

  • Hierarchical chart: Top-down “tree,” CEO at top, several layers of management below.
  • Flat chart: Few management layers, wider levels at each tier.
  • Matrix chart: Grid showing dual-reporting in project and department (often drawn as a two-dimensional table).
  • Divisional chart: Product or regional managers under top management, each with own teams.
Visual examples:
CEO Finance HR Sales Manager A B C D E
Examples: Traditional hierarchy (left) vs. flat organization (right).

Charles Handy’s Shamrock Organization

Charles Handy proposed the “Shamrock Organization” to reflect changing workforces. Instead of one standard type of worker, organizations have three main “leaves”:
  • Core workers: Full-time, skilled professionals essential to the main mission (e.g., managers, R&D, designers).
  • Contractual fringe: Specialists hired as needed (e.g., consultants, freelancers, legal, IT, marketing).
  • Flexible labor: Part-time, seasonal or temporary workers (e.g., retail assistants, event staff, gig economy).
Core Flexible Contract
The “shamrock” represents how modern firms use three workforce types to gain flexibility, reduce fixed costs, and focus on what each does best.

Key Takeaways & Exam Tips

  • Structure affects workflow, decision speed, and motivation—no “one best way.”
  • Be able to draw and interpret basic org charts (hierarchical, flat, matrix, divisional).
  • Handy’s Shamrock: MANY businesses mix full time & flexible arrangements for control and adaptability. Explain the features and reasons for this model.
  • Key terms: span of control, chain of command, delegation, centralization/decentralization, empowerment.
Shares: