1.4.3 Organisational Design

Question 1

What is a chain of command within a business?

Answer 1

• The formal line of authority that flows down from the top management to lower-level employees

Question 2

What is the span of control within a business?

Answer 2

• Refers to the number of employees that a manager or supervisor can effectively manage

Question 3

What are centralised and decentralised structures within a business?

Answer 3

In a centralised structure, decision-making authority is concentrated at the top of the organization with senior management making most of the decisions

In a decentralised structure, decision-making authority is distributed throughout the organization, with lower-level employees having more decision-making power

Question 4

What are the three types of organisational strucutres within a business?

Answer 4

• Tall
• Flat
• Matrix

Question 5

What is a tall organisational structure?

Answer 5

• Characterised by multiple levels of management and a more centralised decision making process
• A long chain of command
• Common in large organisations with complex operations e.g. government agencies & universities

Question 6

What is a flat organisational structure?

Answer 6

• Characterised by fewer levels of management and a more decentralised decision-making process
• A short chain of command
• Common in small organisations or start-ups e.g. tech start-ups and small businesses

Question 7

What is a matrix organisational structure?

Answer 7

• The structure is usually built around specific products or projects e.g. KitKat has its team within Nestlé
• It combines the functional areas of a business e.g HR with a specialist team that operates inside the business

Question 8

What are the advantages of a matrix organisational structure?

Answer 8

Advantages:
* Allows for specialisation and expertise within each functional area
* Promotes cross-functional collaboration and communication

Disadvantages:
* Can lead to conflicts over priorities and resources
* Can create confusion over roles and responsibilities particularly when multiple managers are involved

Question 9

What are the advantages and disadvantages of a tall structure?

Answer 9

Advantages:
- Provides a clear hierarchy of authority and defined roles and responsibilities
- Promotes specialisation and expertise within each department or function

Disadvantages:
- Can create communication barriers between the upper and lower levels of the hierarchy
- Decision-making can be slow as information must pass through multiple layers of management

Question 10

What are the advantages and disadvantages of a flat organisational structure?

Answer 10

Advantages:
* Promotes a culture of collaboration and open communication
* Decision-making can be faster and more efficient

Disadvantages:
* This can lead to role ambiguity and a lack of a clear hierarchy
* May not provide clear opportunities for career advancement or promotion