Study Notes
Overview
Welcome to the study of Organisational Structures. This topic is fundamental to understanding how a business operates internally. Examiners expect candidates to not only define key terms like 'span of control' and 'chain of command' but also to analyse how different structures (tall vs. flat) impact communication, motivation, and efficiency.
Every business, from a local independent coffee shop to a massive multinational corporation like Tesco, relies on a structure to coordinate its workforce. Your ability to apply these concepts to specific business scenarios is what will elevate your answers into the highest mark bands. Let's break down the core components you need to know.
Core Concepts
1. Span of Control
Definition: The number of subordinates (employees) who report directly to a single manager.
Key Details:
- A wide span of control means one manager oversees many employees. This is cheaper but can lead to less supervision.
- A narrow span of control means a manager oversees few employees. This allows for closer supervision but increases management costs.
Examiner Tip: Always link span of control to costs and supervision levels. Examiners award credit for understanding the trade-off between the two.
2. Chain of Command
Definition: The line of authority that moves from the top of a hierarchy to the lowest level.
Key Details:
- It shows how instructions are passed down and how information flows up.
- A long chain of command can result in slow communication and distorted messages.
3. Delegation
Definition: Passing authority and responsibility for a task down to a subordinate.
Key Details:
- Empowers employees and builds their skills.
- Frees up managers to focus on strategic tasks.
- Risk: If the subordinate is untrained, mistakes can occur.
4. Delayering
Definition: The removal of one or more levels of hierarchy from an organisational structure.
Key Details:
- Advantages: Reduces costs (fewer management salaries) and speeds up communication.
- Disadvantages: Can cause job insecurity, lower morale, and increase the workload for remaining managers.
5. Communication
Definition: The process of exchanging information between individuals or departments.
Key Details:
- Structure directly impacts communication. Flatter structures generally facilitate faster, more accurate communication than tall structures.
Types of Organisational Structure
Tall Structures
Characteristics: Many levels of hierarchy, narrow spans of control, long chains of command.
Impact:
- Pros: Clear promotion paths, close supervision.
- Cons: High management costs, slow communication, workers may feel alienated.
Flat Structures
Characteristics: Few levels of hierarchy, wide spans of control, short chains of command.
Impact:
- Pros: Lower costs, faster communication, greater employee empowerment.
- Cons: Managers may be overstretched, fewer opportunities for promotion.
Audio Revision
Listen to our comprehensive 10-minute podcast covering all these concepts with examiner tips and a quick-fire quiz:
Worked Examples
3 detailed examples with solutions and examiner commentary
Practice Questions
Test your understanding — click to reveal model answers
Explain one disadvantage to a business of having a wide span of control. (3 marks)
Hint: Think about the manager's workload and how closely they can monitor staff.
Evaluate whether a small, newly established graphic design agency should use a flat organisational structure. (9 marks)
Hint: Discuss the benefits (speed, cost) against the drawbacks (manager workload), and make a final judgement based on it being a 'small, newly established' business.