1.4.3 - Organisational Design

Question 1

What is an organisational design?

Answer 1

The way that employees and their job roles are organised in a business

Question 2

Definition of hierarchy

Answer 2

Levels of authority within an organisation
- Higher the position the more power

Question 3

Chain of command definition

Answer 3

Flow of information, power and authority through the business

Question 4

Span of control definition

Answer 4

Number of employees that a manager or supervisor can effectively manage

Question 5

Subordinate definiton

Answer 5

An employee who is lower in rank or job position than their manager

Question 6

Delegation definition

Answer 6

Where a task is given to a subordinate employee in the hierarchy

Question 7

Delayering definition

Answer 7

Removing of layers of management from the hierarchy of an organisation

Question 8

Characteristics of a tall organisational structure

Answer 8

• Characterised by multiple levels of management
• More centralised decision making process
• Long chain of command
• Common in large organisations

Question 9

Characteristics of a flat organisational structure

Answer 9

• Characterised by fewer levels of management
• More decentralised decision making process
• Short chain of command
• Common in small organisations

Question 10

Characteristics of a matrix organisational structure

Answer 10

• Usually built around specific products
  (KitKat has a team in Nestle)
• Combines functional areas of a business (marketing, sales etc) with a specialist team inside the business

Question 11

Advantages of a tall organisational structure

Answer 11

• Clear hierarchy and defined roles
• Promotes specialisation in each department
• Offers opportunities for promotion
• All can increase efficiency and motivation

Question 12

Advantages of a flat organisational structure

Answer 12

• Promotes open communication
• Faster and more efficient decision making
• Encourages innovation and flexibility

Question 13

Advantages of a matrix organisational structure

Answer 13

• Promotes cross-functional collaboration - Specialisation in each area
• Enables efficient allocation of resources

Question 14

Disadvantages of a tall organisational structure

Answer 14

• Communication barriers between upper and lower
• Slow decision making
• Expensive as more managers and supervisors

Question 15

Disadvantages of a flat organisational structure

Answer 15

• Can lead to role ambiguity and a lack of clear hierarchy
• May not be clear opportunities for promotion
• May need to take on multiple roles leading to burnout

Question 16

Disadvantages of a matrix organisational structure

Answer 16

• Conflicts over priorities and resources
• Confusion over roles
• Requires a high degree of communication

Question 17

What is a centralised organisation?

Answer 17

Decision-making authority is concentrated at the top of the organisation

Question 18

What is decentralised organisation?

Answer 18

Decision-making authority is distributed throughout the organisation, with lower-level employees having more decision-making power

Question 19

Advantages of a centralised organisation

Answer 19

• Lots of experienced members making decisions
• No bias towards one department
• Quick decisions as no need to consult others

Question 20

Disadvantages of a centralised organisation

Answer 20

• Excluding employees from decision making may be demotivating
• Slow reaction to change may allow competitors to get ahead

Question 21

Advantages of a decentralised organisation

Answer 21

• Motivates employees
• Employees can use expert knowledge of their sector
• Quick decision making

Question 22

Disadvantages of a decentralised organisation

Answer 22

• May not have enough experience to make decisions
• May not see the overall business situation

Question 23

What is a narrower span of control?

Answer 23

More layers of management

Question 24

What is a wider span of control?

Answer 24

Fewer layers of management