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Business Management

ABC Manufactoring Company – ABC is a UK based manufactoring compnay making clothing products for retail outlets in the UK. Contructing two organisation charts for ABC before and after restructoring from the information below Before restructoring ABV has a senior management team consisting of a managing director and four directors. The compoany is split into four functional departments- Marketing, Finance, Human Resources and Production.

The Marketing department has two managers, a research manager and a sales manager. The sales manager controls two sales representatives and two sales supervisors. Each sale supervisor controls one worker and a customer service advisor. Each customer service advisor controls one clerk. The Finance Director is responsible for one finance accountant and one management accountant. Both have two account supervisors. The HR Director has two managers, one HR manager and one Administration Manager. Each manager has two office supervisors whom control one assistant

The Production Directoris responsible for one production manager, one Chief buyer and a distribution manager who controls two distribution addistants. The production manager has three assistant managers whomcontrol ten production workers each After restructoring Following the restructure it was decided to amalgamate the third and fourth ties of the hierarchy: In the marketing department there were four redundancies and two new posts of

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marketing manager were created. In the finance department there were four redundancies and two new posts of

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accounts manager were created

In the HR department there were four redundancies and two new posts of

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HR manager were created The production department remained the same The chart shows on page 2 is before restructuring and the diagram on page 3 is after the restructoring of the company. Every business benefits from having a good organisational structure, because it is clear to see what every person does and makes it easier to run the business. Using the different methods by dividing the company by functions, area, production will make it much easier to achieve the settled goals and it might be much quicker. There are many features that one organisational chart can provide just by looking at it. With ABC Manufacturing Company we have two different types:

Hierarchy, which is first chart on page 2 and shown the chart of the company before restructuring Wide Span structure , the chart of page 3 and shows the company’s organisational chart after restructuring Hierarchy organisational chart is usually used by big companies where are different department need to do different tasks effectively. It is simple and easy to use, shows clearly who is in charge and what is each person job. Usually tend to be centralised rather delegated because its authority power is held at higher lever in the organisation. The advantages of centralisation are that senior management ( ABC managing director and his senior management team are in great control of the business ‘ budget). With big organisations such as ABC the business needs strong leadership by the central group senior management team in order to achieve the goals sets from the managing director.

Good example of centralised hierarchy organisational chart is the big department store Harrods, where are many different departments. When the chairman gives big tasks such as future annual sales figure he gives that information to the senior management team. Therefore the senior management team passes that information broken down by quarters of the year and sections (e.g. Lady’s fashion and Gent’s Fashion; Furniture and Cosmetics; Toys and Restaurants) to the floor managers, who on their place pass that information, which is broken down by monthly targets and relating to the sales from the previous year of the department, to different department manager. Last step is that department managers are breaking down the information to the employees giving them individual monthly and weekly target.

Such a long and complicated task, on first look easy, will be hard for the chairman to do by himself. All this breaking down the task into different little tasks makes is easier for the employees to achieve and even to do better than the expected. However the centralised hierarchy has its disadvantages in this case is that gives pressure of making decisions to the person who is on top of the organisation. Also there is not much motivation of promoting employees, because the company has already employed qualified and experienced people to do the job. Other problem is the communication between the person on top and customers, example is when making any refurbishments with the idea that customers will like and enjoy it might be working against the business, because customers might not like the idea therefore the company is not making any profit but lost.

Wide Span Structure is simpler of the hierarchy because it does not have so many people in the chain. That type if structure tent to be much wider and most of the tasks to be spread to different people. Usually small business, with not many employees and less funds available, have delegated structure.

Delegated structure gives the opportunity for better communication with the different levels within the organisation, also gives more motivation to the employees by giving them more right to make different decisions. This could be twisted if the person who is on top is not careful because they might lose control over the company. Gives the senior management less stress and more time to concentrate on more important tasks. However there will be more stress for the employees in order to complete their tasks and at the same time to do their job; this might affect their productivity and company’s income. Example, if Harrods went to delegated structure and the sales assistants have to take care of documentations and placing orders their sale productivity will be affected because there will not be enough time to do all the tasking, therefore the company is not achieving their goal that quick and the employees have more stress at work.

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