The Tasty Bun and Biscuit Company currently operates via one factory within Tiptown in the Midlands. This factory employs 600 staff and has two production lines for cakes and biscuit’s, which are distributed to suppliers within the Midlands area. The current core organisational framework of TBBC consists of one Managing Director who has line authority and a span of control of four Directors. These include the Baking Director, Personnel Director, Finance Director and Distribution and Marketing Director. Each of these Directors has line authority to their subordinates; the number of these varies depending on the individual departments.
The Baking Director has line authority for 420 staff, as opposed to the Finance Director who has responsibility for 10 staff. Each of the four Directors has specialised responsibility and authority for all issues concerning their own department. Individually they have a lateral relationship and are required to report directly to the Managing Director. It should be noted that the Personnel and Finance departments differ from the Baking and Distribution departments as they also maintain two other roles. The first of these roles is known as a functional relationship.
This indicates that the department offers specialist advice on specific issues, which has no connection or authority with the users of the service. The second of these roles is known as a staff relationship. This describes that the individuals within the department offer assistance on broad-spectrum issues but have no direct authority. Having reviewed the case sketch, it would appear that TBBC presently operates a functional organisational structure. The activities within TBBC are grouped together into different departments.
This view is held having viewed the scalar chain, as TBBC’s functional organisational structure has broader spans of control and few levels of authority, this also represents flat hierarchical structure. Although TBBC is an established firm, this type of structure imposes complications on day to day activities amongst employees. With only two levels between the Managing Director and staff, this may incur less financial costs but could, however, cause poor communication especially to the workforce, along with minimal promotional opportunities and little support for training and development.
This could cause poor morale within the company resulting in an increased turnover of staff and decreased continuity of performance. All of these factors could have a major impact on the image and reputation of TBBC if not monitored closely. With The Tasty Bun and Biscuit Company planned expansion, consideration should be given into concentrating individual lines at each of the new factories. This report will look at the advantages and disadvantages of individual lines, along with conclusions.