1.4.3 Organisational Design

Question 1

Define organisational design

Answer 1

A diagram/chart which shows the lines of authority and layers in the hierarchy of a business

Question 2

What are the components that make up structure in a business?

Answer 2

Hierarchy
Chain of command
Span of control

Question 3

Define hierarchy

Answer 3

A system where employees are ranked due to their status and authority

Question 4

Define chain of command

Answer 4

The route that orders travel down in an organisation and complaints travel up

Question 5

Define span of control

Answer 5

Number of subordinates that a supervisor/manager is in charge of

Question 6

What are the affects of a small span of control?

Answer 6

There will be a tall hierarchy and jobs will be specialised.

Question 7

What are the affects of a wide span of control?

Answer 7

Creates a flat hierarchy and employees are given more responsibility and larger roles

Question 8

Define centralisation

Answer 8

Where a business has its organisation of management and administration at one central head office.

Question 9

Define decentralisation

Answer 9

Where a business divides up the organisation of its business into areas. Each area has separate budgets

Question 10

What are the types of organisational structure?

Answer 10

1. Tall
2. Flat
3. Matrix

Question 11

Define tall structure

Answer 11

Hierarchy design which as a long chain of command but a short span of control

Question 12

Advantages of a tall structure

Answer 12

• supervisors have a small span of control so they can get to know their subordinates really well.
• knowing subordinates means they can delegate the right tasks and ensure their team is well trained.

Question 13

Disadvantages of a tall structure

Answer 13

• business is inflexible due to long chain of command.
• communication is slow.
• expensive as there are more mangers and supervisors.

Question 14

Define flat structure

Answer 14

Hierarchy design which has few layers with a short chain of command but a wide span of control

Question 15

Advantages of a flat structure

Answer 15

• fast communication as there’s fewer layers.

- staff have more responsibility and opportunities.

Question 16

Disadvantages of flat structures

Answer 16

• staff can be overstretched as there’s less supervision.
• creates power struggle if manager is not around (subordinates jostle for roles).
• wide span of control means too many staff to manage.

Question 17

Define matrix structure

Answer 17

Hierarchy design which groups by project and function.

Question 18

When would a business use a matrix structure?

Answer 18

When there are more than one product/project running at a time.

Question 19

Advantages of a matrix structure

Answer 19

• very flexible meaning staff can have different job roles.

- perfect to exploit the specific skills of staff

Question 20

Disadvantages of the matrix structure

Answer 20

• coordination problems between departments.
• conflict of interest across projects.
• staff are stretched across different projects.