4.1 Organisational Structures

Question 1

What is meant by the term “organisational chart”?

Answer 1

A plan showing the roles, and relationships between, all the employees in a business.

Question 2

What is meant by the term “organisational structure”?

Answer 2

The way a business arranges itself to carry out its activities.

Question 3

What is meant by the term “authority”?

Answer 3

The power to control others and to make decisions.

Question 4

What is meant by the term “line manager”?

Answer 4

An employee’s immediate superior or boss.

Question 5

What is meant by the term “hierarchy”?

Answer 5

The layers of authority within a business.

Question 6

What is meant by the term “span of control”?

Answer 6

The number of employees managed directly by another employee.

Question 7

What is meant by the term “chain of command”?

Answer 7

The line of authority within a business along which communication passes.

Question 8

What is meant by the term “delayering”?

Answer 8

The removal of one or more levels of hierarchy from a business’ organisational structure.

Question 9

What is meant by the term “delegation”?

Answer 9

Passing down authority to more junior employees.

Question 10

What is meant by the term “communication”?

Answer 10

The exchange of information between two or more people.

Question 11

What is meant by the term “centralisation”?

Answer 11

When a small number of senior managers in a business take all the important decisions.

Question 12

What is meant by the term “decentralisation”?

Answer 12

Allows employees working in all areas of the business to take decisions.

Question 13

What are the advantages of decentralisation?

Answer 13

> junior employees may feel valued increasing their production levels.
workload of senior managers decreased.
improved decision making.

Question 14

What are the disadvantages of decentralisation?

Answer 14

> training needed for junior employees to make decisions increasing costs.
harder to co-ordinate decisions.
junior employees may not take decisions with the right goals in mind as they may not understand the overall goals of the business.

Question 15

Explain the details about a tall organisational structure (2).

Answer 15

• Long chain of command meaning there are more layers of management.
• Each manager has a narrow span of control making the firm more effective as managers can monitor the employees they are responsible for more closely.

Question 16

Explain a Flat Structure in Detail.

Answer 16

> short chain of command.
each manager has a wide span of control.
difficult to do effectively as managers have to manage a lot of employees at once.

Question 17

What are the 3 types of communication?

Answer 17

> downwards.
upwards.
horizontal.

Question 18

What are the advantages of centralisation?

Answer 18

> consistency across the business.
the business has a clear direction.
operations and decisions are closely controlled and managed.
the chain of command and accountability are clear.

Question 19

What are the disadvantages of centralisation?

Answer 19

> it can demotivate employees.
a standardised approach may not work in all business locations.
it may lower productivity.