Structures

Question 1

What is hierarchy?

Answer 1

This means positions within the organisations with different levels of authority and responsibility; those with the least amount of authority and responsibility at the bottom of the organisation and those with the most at the top.

Question 2

What is chain of command?

Answer 2

This refers to when commands flow down from the decision-makers at the top of the organisation to the workers at the bottom.

Question 3

What is a tall structure?

Answer 3

A tall structure has many levels of management and resembles a large pyramid. This type of structure suits large organisations with many specialised departments.

Question 4

What are advantages of a tall structure?

Answer 4

• Each member of staff knows their role and who to report to.
• With many levels come many promotion opportunities which can motivate staff.
• There is a narrow span of control which means:
  -Managers have more time for planning, supervision and decision-making.
  -Managers can support subordinates.

Question 5

What are disadvantages of a tall structure?

Answer 5

• Communications take time to flow down through the levels, which slows down decision-making.
• The organisation can be slow to react to changes in the market.
• The narrow span of control means:
  -Managers supervise work more closely, which can put staff under pressure.
  -Managers have fewer staff to share ideas with.

Question 6

What is a flat structure?

Answer 6

This is also a pyramid-shaped structure and, like a tall structure, commands flow from top to bottom. However, a flat structure has fewer levels of management and a shorter chain of command than a tall structure. This type of structure suits small to medium-sized organisations.

Question 7

What are advantages of a flat structure?

Answer 7

• Information can be communicated quickly between levels.
• The organisation can respond quickly to external (PESTEC) factors, such as competition.
• There is a wide span of control which means:
  -Managers have to delegate tasks to staff which can raise morale as staff feel trusted.
  -Staff are empowered to make decisions themselves.

Question 8

What are disadvantages of a flat structure?

Answer 8

• Fewer levels means fewer promotion opportunities so quality staff may leave to gain promotion in larger organisations.
• As there are fewer management levels, staff may be delegated more tasks, which could put them under pressure.
• The wide span of control means:
  -Managers’ time is at a premium which can lead to snap decisions.
  -Less time for planning.
  -Subordinates may have no one to seek help from.

Question 9

What is delayering?

Answer 9

This is when removing one or more levels of management from a tall structure to make it flatter.

Question 10

What are advantages of delayering?

Answer 10

• Money is saved paying the salaries of the management level that is removed.
• Quicker decision-making and communication are possible as there is a shorter chain of command.
• The organisation can be more responsive to changes in the market as there are fewer levels for information to pass through up to the decision-makers.
• There is a wider span of control.

Question 11

What are disadvantages of delayering?

Answer 11

• There are fewer promotion opportunities for staff.
• Redundancy payments will cost the organisation a significant amount of money.
• The organisation will lose key members of staff in the restructure.
• There is a wider span of control

Question 12

What is a centralised structure?

Answer 12

Decision-making and control is kept at the very top level. In organisations with many branches, decision making is retained within head office and the senior management, directors or owners that work there.

Question 13

What are advantages of a centralised structure?

Answer 13

• A high degree of corporate identity and strategy exists as decisions are made for the whole organisation.
• Procedures are standardised which ensures consistency.
• There is a low risk of important information leaking from branches or departments.

Question 14

What are disadvantages of a centralised structure?

Answer 14

• Less responsibility is given to subordinates which can result in demotivated staff.
• Decisions will not reflect the needs of local markets.
• The organisation will react slowly to external (PESTEC) factors, such as the competition improving their product range.

Question 15

What is a decentralised structure?

Answer 15

Decision-making and control is delegated to individual branches or departments. This type of structure is best used in retail chains that need to respond to the needs of their local market, such as supermarkets.

Question 16

What are advantages of a decentralised structure?

Answer 16

• The business reacts quickly to changing external (PESTEC) factors.
• Decisions are made quickly as local managers don’t need to consult senior managers before implementing decisions.
• Senior management at head office are relieved of the burden of constant decision-making.

Question 17

What are disadvantages of a decentralised structure?

Answer 17

• The organisation can lose an overall corporate image if each department/branch operating differently.
• Local branches could start to compete with each other if they are allowed to make key decisions.
• Additional training required for middle management.
• Lower level management can make decisions that could harm the business as a whole.

Question 18

What is a matrix structure?

Answer 18

A matrix structure involves an organisation being arranged into temporary project teams to carry out a particular task, such as developing a new product or service, or a large-scale construction operation.

Teams are made up of employees from different functional areas: marketing, finance, research and development etc.

Each staff member will have 2 managers; 1 will be the manager of their functional area and 1 will be the project manager.

Question 19

What are advantages of a matrix structure?

Answer 19

• Each team has specialised staff from all functional areas.
• complex problems can be solved.
• Staff can use their expertise and as such have job satisfaction and motivation.

Question 20

What are disadvantages of a matrix structure?

Answer 20

• Many managers across all project teams will mean high wage costs.
• Duplication of resources such as administration staff and equipment.
• Staff can be confused as to who to report to.

Question 21

What is a entrepreneurial structure?

Answer 21

This is a structure used primarily by small organisations. Usually, they have one main decision-maker, the owner themself. Other staff can have some input but generally they are rarely consulted and final decisions are made by the owner.

Question 22

What are advantages of a entrepreneurial structure?

Answer 22

• Decisions are made quickly as there is little consultation.
• Staff know who they need to report tp.
• High-quality decisions are made as decision-makers are experienced.

Question 23

What are disadvantages of a entrepreneurial structure?

Answer 23

• This structure can create a heavy workload for the main decision maker.
• If the owner is busy or not available, key decisions can’t be made.
• Other staff don’t get a chance to show initiative, stifling creativity and possibly demotivating some staff.