1.4.3 Organisational Design

Question 1

define organisational chart

Answer 1

a diagram or chart showing lines of authority and layers in the hierarchy of a business

Question 2

what is a hierarchy

Answer 2

a system in which businesses are ranked in levels based on status and authority

Question 3

what is the chain of command

Answer 3

it is a formal line of authority from the top management to the low level employees

Question 4

what is the span of control

Answer 4

how many employees are reporting to one manager
wide span = few layers of management
narrow span = more layers of management

Question 5

what are the three types of organisational structure

Answer 5

1 tall
2 flat
3 matrix

Question 6

what is a tall organisational structure

Answer 6

• have a long chain of command with lots of levels of management
• often seen in large organisations

Question 7

what are the advantages of a tall structure

Answer 7

+ narrow span of control allows managers to have control over productivity
+ more opportunities for promotion which is motivating

Question 8

disadvantages of a tall structure

Answer 8

• long chain of command negatively impacts communication and efficiency
• expensive as there are more managers and supervisors
• people may feel overwhelmed if they feel like they are being micromanaged

Question 9

what is a flat organisational structure

Answer 9

• few levels in the hierarchy
• wide span of control and short chain of command

Question 10

advantages of a flat structure

Answer 10

+ shorter chain of communication allows for quicker communication and increased responsivness
+ promotes culture and creativity and innovation as employees have more freedom and flexibility, resulting in higher motivation

Question 11

disadvantages of a flat structure

Answer 11

• managers have a wide span of control so it may be difficult for them to monitor employees
• managers may not have the time to support the workforce which may be demotivating
• not as many opportunities for career advancement, reducing motivation

Question 12

evaluate delayering as an option for a business

Answer 12

+ can reduce costs
- could be costly short term, redundancy pay and retraining current employees
+ shortens the chain of command which makes communication and decision making quicker
- managers may a wider span of control that they can’t manage effectively

Question 13

what is a matrix organisational design

Answer 13

orgainses staff on two criteria
for example project and function.
this will show the department and project that the employee is working on

Question 14

advantages of a matrix design

Answer 14

+ helps build relationships between departments that are working on the same project
+ allows for collaboration of expertise from different areas of the business

Question 15

disadvantages of a matrix design

Answer 15

• may lead to conflict over resources and priorities
• creates confusion on roles and authority when multiple managers are involved
• requires a high degree of communication

Question 16

explain and evaluate a centralised organisation

Answer 16

all decisions are made by senior managers at the top of the business
+ Business leaders are experienced
+ Quick and easy to make decisions in response to a dynamic market or threat
+ Managers get an overview of the whole business so aren’t biased to certain departments
- may not have enough detailed insight into each department in the business to make decisions for them
- excluding employees from decision making is demotivating

Question 17

explain and evaluate a decentralised organisation

Answer 17

authority and decision making is shared
+ Staff feel more valued so more motivated
+ Employees provide expert knowledge within their sectors
+ Decisions can be made quickly
- Junior managers may not have enough experience
- inconsistencies may develop between divisions in a business
- junior managers may not be able to see the overall aims and direction of the business