4.1 Organisational structures

Question 1

Span of control

Answer 1

Number of subordinates a manager supervises.

Question 2

Chain of command

Answer 2

Formal line of authority and communication in an organisation.

Question 3

Delayering

Answer 3

Process of reducing number of levels in an organisation hierarchy.

Question 4

Delegation

Answer 4

Assigning tasks and responsibilities to others.

Question 5

Different job roles and their responsibilities in an organisational structure

Answer 5

• Director: make key decisions.
• Managers: implement key decisions into action and oversee business activity.
• Supervisors: oversee small group of subordinates and regulate everyday tasks.
• Subordinates: carry out day to day tasks.

Question 6

Impact of flat organisation on how business is managed

Answer 6

• Small chain of command - less managers meaning communication channel is simple.
• Wide span of control - subordinates are delegated more responsibility so managers need to ensure smooth communication and operations.

Question 7

Impact of tall organisation on how business is managed

Answer 7

• Large chain of command - more managers meaning communication channel is more complex.
• Small span of control - more managers means increased overhead costs but better support and guidance to individual workers.

Question 8

How organisational structure may affect the different ways of communication.

Answer 8

• Taller means slower communication, leading to delays and misinterpretations, as there are more layers.
• Taller means formal channels like emails, memos and reports are normal rather than meetings and open-door policies.
• Taller means controlled communication - strict chain of command limits communication outside established channels.

Question 9

Centralised

Answer 9

Decisions made by those at the top of the business (directors).

Question 10

Decentralised

Answer 10

Authority for decision making is delegated further down the hierarchy.

Question 11

Advantages of centralisation

Answer 11

• Effective co-ordination and control of the business operations from the centre.
• Fast and decisive decision-making can increase competitiveness
• More consistency across whole organisation.

Question 12

Disadvantages of centralisation

Answer 12

• Managers that lack autonomy may become demotivated.
• Highly bureaucratic
• Ignores insights of lower-level staff who may be closer to customers.

Question 13

Advantages of decentralisation

Answer 13

• Better able to meet local market conditions and meet customer needs.
• Staff ability to contribute to decision making may increase motivation, fulfilment and loyalty.
• Prepares junior managers for future career development.

Question 14

Disadvantages of decentralisation

Answer 14

• Diseconomies of scale
• May be difficult to tughtly control budgets
• During times of crisis, decision making may not be clear
• Less consistency across whole organisation.