Chapter 2

　　organisation structure

　　Chapter learning objectives

　　Upon completion of this chapter you will be able to:

　　§ explain the different ways in which an organisation might be structured

　　§ list advantages and disadvantages of each type of organizational arrangement

　　§ define the terms scalar chain and span of control

　　§ what factors influence the span of control

　　§ give reasons why ownership and management of the organisation are often separated

　　§ explain what is meant by centralised/decentralised structure

　　§ what are the advantages and disadvantages of the informal organisation

　　§ identify what impact the informal organisation has on the business

　　§ how can managers foster the benefits of the informal organization while at the same time reducing its potential disadvantages.

　　1 Organisational structure

　　1.1 Different types of structure

　　A typical pattern of structure change can be represented by the following sequence.

　　Entrepreneurial

　　§ This type of structure is built around the owner manager and is typical of small companies in the early stages of their development.

　　§ The entrepreneur often has specialist knowledge of the product or service

　　§ Example owner/managed business