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Business Management

Internal organisation

Functional activities

When hiring large numbers of staff, organisation is important. Everyone within the company needs to understand their role.

Structuring a business

Managers need to organise their staff and keep them motivated.

As a business grows in size and takes on more staff, managers need to make sure employees understand their role within the company. Organisation is the way a business is structured. One method of organisation is to set up departments covering the four main areas of business activity:

  • Finance
  • Human resources
  • Marketing
  • Operations

Organisation charts

Organisation charts are diagrams that show the internal structure of the business. They make it easy to identify the specific roles and responsibilities of staff. They also show how different roles relate to one another and the structure of departments within the whole company.

An organisational chart showing the structure of a company, starting with the CEO at the top, down to the 4 company directors- the director of finance, the director of HR, the director of marketing and the director of operations. Beneath them there are regional managers who in turn supervise many other people.

An organisational chart showing the structure of a company. For example, the Marketing Manager in the Midlands can see at a glance that she is in charge of ten subordinates, and that her line manager is the Director of Marketing.

It is worthwhile understanding some key positions of influence in larger organisations:

The Board of Directors are elected by the owners/shareholders. They act as a committee to meet and oversee the running of the firm. They seek re-election at the Annual General Meeting (AGM).

The Managing Director (MD) or Chief Executive Officer (CEO) - this position is appointed by the Board and forms an important link between senior managers and the Board of Directors. The CEO is the main decision maker in the organisation and is involved in the day to day running of the organisation. The CEO will delegate roles, duties and tasks to other managers, however through reporting, monitoring and control systems will keep up to date with issues affecting performance.

The Chairperson is the position of the Head of the Board of Directors. The Chairperson is appointed by the Board of Directors and is usually very experienced in the industry. A high profile company such as Tesco or BP will appoint a Chairperson who will be able to deal effectively with the media as they will be in the public eye.

Executive Directors are appointed to the Board due to their expertise and knowledge in the field. They are normally recommended by the CEO to sit on the board.

Non-executive Directors are directors who are independent and assume the role of consultants to the organisation. They are less likely to be influenced by a strong CEO and his appointees.

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