Bureaucracy

The administrative systems within an organization, such as the formal policies and procedures of the business. It includes the formal rules, regulations and procedures of the organization.

Centralization

The situation where decision-making is predominantly made by a very small group of senior managers at the top of the organizational hierarchy.

Chain of command

The formal lines of authority in an organization. It can be seen via an organizational chart, which shows the formal path through which commands and decisions are communicated from senior managers to subordinates.

Communication

The transfer of information from one entity to another. It is vital to how a business operates.

Culture

Concept referring to the norms, attitudes, values, goals, and practices that characterises an organization, a country or a region of the world.

Decentralization

The situation in an organization where decision-making authority is delegated throughout, rather from a central authoritative group.

De-layering

This occurs when an organization removes one or more layers in its hierarchical structure, i.e. the number of layers of management is reduced, or made flatter.

Delegation

The act of line managers entrusting and empowering employees with authority to successfully complete a particular task, project or job role.

Flat organization

Also known as a horizontal structure, this type of organizational structure has only a few layers of management.

Flat structure

Type of organizational structure that has few levels in the organizational hierarchy.

Hierarchical

A type of organizational structure that is tall/vertical, with many levels in terms of ranks.

Innovation

Concept referring to the process of creating a product (good or service) that is new, better and of commercial value.

Invention

Part of the process of innovation that involves creating a product that is completely new to the market.

Iteration

Part of the process of innovation that involves creating a change/improvement in a product that already exists.

Levels of hierarchy

The number of layers of formal authority in an organization. It is represented in an organizational chart.

Managers

People responsible for the day-to-day running of the business or a department within the business.

Organization by function

Structuring a workforce according to business functions, i.e. specialised roles or tasks.

Organization by product

Structuring a workforce according to the goods or services sold. Each department focuses on a different product within the organization’s overall product portfolio.

Organization by region

Structuring a workforce according to different geographical areas based on where the firm’s operations are.

Organizational chart

A diagrammatic representation of an organization’s formal organizational structure.

Organizational structure

The formal interrelationships and hierarchical arrangements within a firm.

Outsourced workers

Also known as outsourced vendors or the contractual fringe, these are the individuals or other organizations hired on a contract basis to carry out a specific but non-core role in Charles Handy’s Shamrock organization.

Peripheral workers

According to Charles Handy, these are the contingent workers, consisting of part-time and temporary staff hired by the organization.

Professional core

According to Charles Handy, these are the core workers consisting of full-time specialists who are vital for the organization’s operations and survival.

Project-based organization

Also known as a matrix structure, this flexible organizational structure is based on the specific needs of a particular short-term or temporary project.

Shamrock organization

Type of flexible organizational structure, coined by Charles Handy, advocating that organizations must adapt to changes in the business environment by having a core workforce, contingent workforce and outsourced vendors.

Span of control

Refers to how many workers are directly accountable to (or under the authority of) a particular line manager.

Tall organization

Also known as a vertical structure, this type of organizational structure has many layers in the organizational hierarchy.

Tall structure

Type of organizational structure that has many levels of hierarchy, so the span of control is likely to be narrow.