Business Management
Senior 4 · Entrepreneurship
Business Management
Lesson 5 of 5
25 min
Uwase started a cassava-flour mill in Ruhango with eight workers. Today it employs about 45 people on two shifts, sells to shops in three districts and keeps its own delivery vans. Every one of them still brings every question to Uwase: an operator who needs a spare part, a driver who needs fuel money, a customer who wants credit. She works fourteen hours a day, yet decisions wait, and two supervisors gave the night shift opposite instructions last week. (Uwase and her mill are illustrative.)
Think about it: what would you change so that most questions are answered without Uwase, and everyone knows whom to ask?
Definition
Organisational structure: the formal way a business divides its work into jobs and departments, and sets out who has authority over whom and how information flows. It is drawn as an organisation chart.
Definition
Hierarchy: the levels of authority from top to bottom. Chain of command: the line along which instructions pass down and reports pass up. Span of control: the number of people who report directly to one manager.
Example: a supervisor with 15 operators has a span of control of 15.
Definition
Authority: the right to make decisions and give instructions. Responsibility: the duty to do a task. Accountability: having to answer for the result. Delegation: passing authority for a task to someone lower in the hierarchy; the manager who delegates stays accountable.
Definition
Centralisation: most decisions are kept at the top. Decentralisation: decisions are delegated to lower levels or branches. Line roles have authority in the chain of command (production manager, supervisor); staff roles advise and support without commanding (quality officer, legal adviser).
| Structure | How work is grouped | Strengths | Weaknesses |
|---|---|---|---|
| Functional | By function: production, sales, finance, human resources | Specialists work together; clear careers; efficient | Departments can work in "silos" and blame one another |
| Product (divisional) | By product line: flour, animal feed, packaging | Each division focuses on its market; easy to measure each one's profit | Functions are repeated in every division, which costs more |
| Geographical | By area: Southern Province, Kigali, exports | Close to local customers and conditions | Duplication; head office may lose control |
| Matrix | By function and by project at the same time | Flexible; mixes skills for projects | Two bosses for one worker can cause confusion and conflict |
Fayol's principle of unity of command says that each worker should receive orders from one superior only. Uwase's night-shift confusion broke it; a matrix structure deliberately bends it and must manage the conflict that results.
A tall structure has narrow spans and many levels: close supervision and clear promotion steps, but slow communication and high management cost. A flat structure has wide spans and few levels: fast decisions, lower cost and more freedom for workers, but each manager has less time per person. The right span depends on how skilled the workers are, how similar their tasks are, and how much the manager has to do besides supervising.
Tip
Five checks for any organisation chart: every job appears once; every person has one line boss; spans are manageable; the chain from the top to any worker is as short as it can be; and staff roles are shown as advisory, not commanding.
Worked example 1: what does the span of control cost?
A factory has 125 operatives. Compare a span of control of 5 with a span of 25. Supervisors earn Frw 250,000 a month, middle managers Frw 500,000 and the general manager Frw 1,200,000. (Illustrative pay.)
Span 5. Supervisors ; middle managers ; general manager . Management levels .
Span 25. Supervisors , who report straight to the general manager. Since , the structure needs 2 management levels.
The flat structure saves Frw a month. But in a 45-hour week a supervisor has hours per worker with a span of 5, and only hours with a span of 25. The wide span suits skilled operators doing similar, routine work; new or unskilled workers need narrower spans.
Worked example 2: designing Uwase's structure
Uwase now has three direct reports instead of 45. The night-shift problem is solved because each operator has one supervisor, and each supervisor one manager.
Warning
Common mistakes. Drawing a chart where one person has two line bosses (unless it is deliberately a matrix); forgetting that delegating a task does not delegate accountability; showing a staff adviser as if she commanded workers; and assuming flatter is always better: very wide spans leave new workers unsupervised.
Two Teachers, "Organisational Structures Explained" (about 8 minutes). Note the video's definitions of span of control and chain of command, and its three structures: hierarchical, flat and matrix. Which one fits Uwase's mill, and why?
Practice
Key points
Further reading
Sources and credits
Written by Ganzaa: the Ruhango case, the organisation chart, the tall and flat diagram, the tables, the worked examples and the practice items. People, businesses and figures are illustrative (2026).
Quick check
