Component 1: People in organisations (human resources) – Organisational design — Eduqas A-Level Business
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Component 1: People in organisations (human resources) – Organisational design explained
The deliberate shaping of a firm's structure: how many layers sit between the chief executive and the shop floor, how wide each manager's span of control is, whether people are grouped by function, product or region, and how far authority is delegated.
Read the full explanation
It is a choice rather than an accident, taken to fit the structure to the strategy. A tall shape with narrow spans gives close supervision and clear promotion rungs but slows information and adds salary cost, while a flat shape with wide spans empowers staff and cuts overhead at the risk of overstretched managers. Greiner's growth model belongs here, because it predicts that a structure which works at one size creates the crisis forcing the next redesign. It is blind to culture, since the same chart behaves differently in a Handy power culture and a role culture.
Understand what is meant by authority, responsibility, chain of command, span of control, delegation, hierarchy, centralisation and decentralisation, empowerment and delayering
These terms are the vocabulary an organisation chart is read with, and credit goes to candidates who use them to diagnose a named firm rather than to label a diagram. Authority is the right to commit resources; responsibility is the duty to answer for the outcome, and the two come apart badly when a manager is held to account for a budget somebody else controls. The number of subordinates reporting directly to one manager moves inversely with the number of levels in the firm: widen it and the structure flattens. Passing a task down with the authority to do it is one thing, passing the judgement as well is another. Pushing decisions out to branches trades speed and local knowledge against consistency and control, and that trade-off is what a long answer should weigh.
Explain the characteristics of different organisational structures including hierarchical (flat and tall) and matrix structures
A structure is a set of reporting lines, and every shape buys something at a price. Tall firms have many levels and narrow spans, so supervision is close and the promotion ladder is visible, but messages distort on the way down and management overhead is heavy. Flat firms have few levels and wide spans, which cuts overhead and shortens decision time while leaving managers stretched and new staff under-supervised. A matrix cuts across both by giving each employee a functional boss and a project boss at the same time, which is why aerospace and consultancy firms such as Airbus run large programmes that way; the price is dual accountability, meeting load and conflict when two bosses want the same person on the same day. Greiner's growth model is a reminder that no shape is permanent, since the structure that suits ten staff fails at two hundred.
Explain the advantages and disadvantages of changing organisational structures and delayering
Restructuring is a decision with a cash cost, a human cost and a payback period, and the strongest answers treat it that way. Stripping out a level of middle managers saves salary cost every year, shortens the route from customer to decision maker and forces the survivors to delegate. Against that sit redundancy payments, the experience and mentoring that leave with those managers, spans too wide to supervise, a thinner promotion ladder and the survivor anxiety that depresses output for months. Lewin's unfreeze, change and refreeze sequence and Kotter and Schlesinger's six responses to resistance supply the language for managing it, and both are blind to money, since neither says whether the saving is worth the disruption. Judge the move against the objective: a cost leadership strategy defends it far more easily than one built on service quality.
Evaluate the choice between empowerment and control of the workforce
The real question is how much discretion a job should carry, and the answer is contingent rather than moral. Giving frontline staff authority to decide within agreed limits is what Herzberg would call a motivator, because it adds responsibility and achievement rather than another payment; it speeds service recovery, cuts supervision cost and usually lowers labour turnover. Keeping decisions with managers through rules, targets and close supervision is what Taylor assumed was necessary, and it still delivers consistency, safety and legal compliance in standardised operations such as a fast food kitchen or a pharmacy counter. Tannenbaum and Schmidt place the two on a single continuum, so the decision is a position rather than a switch, and it turns on task complexity, staff training, the cost of a mistake and the culture already in place.
Evaluate the appropriateness of different organisational structures to a business and its stakeholders
Appropriateness is a relative judgement, so name the criteria before applying them: size and rate of growth, strategy, the variety of products and markets, and how quickly the market moves. A functional hierarchy suits a single product firm competing on cost, because specialists sit together and overhead is controlled. A divisional or regional shape suits a business selling different things in different places. A matrix suits project driven work but multiplies meetings and blurs accountability. Stakeholders then disagree about the same chart: shareholders read it as overhead and want the level count down, employees read it as job security and promotion prospects, customers care only whether the person who answers the phone has authority to fix the problem, and managers resist losing the reports that define their status.
Your focus
- Explain what is meant by organisational design
- Understand what is meant by authority, responsibility, chain of command, span of control, delegation, hierarchy, centralisation and decentralisation, empowerment and delayering
- Explain the characteristics of different organisational structures including hierarchical (flat and tall) and matrix structures
Show all 6 objectives
- Explain the advantages and disadvantages of changing organisational structures and delayering
- Evaluate the choice between empowerment and control of the workforce
- Evaluate the appropriateness of different organisational structures to a business and its stakeholders
Component 1: People in organisations (human resources) – Organisational design exam tips
Marking Points
- Credit for defining it as the deliberate arrangement of structure, covering levels of hierarchy, span of control, the method of grouping staff and the degree of delegation.
- Marks for stating the purpose, which is to fit structure to the objectives, size and rate of change of the business rather than to copy a standard chart.
- Application credit for describing the actual structure of the business in the case and the pressure prompting a redesign, such as rapid growth or a cost reduction programme.
- Evaluation credit for a trade-off, most commonly that flattening speeds decisions and cuts overhead but widens spans of control beyond what a manager can supervise well.
- Distinguishing authority, the right to act and commit resources, from responsibility, the accountability for the result, and noting that delegating a task does not transfer the delegator's accountability.
- Linking span of control to the number of levels: a wider span means fewer layers, a shorter chain of command and less direct supervision of each subordinate.
- Applying a term to the named business, for example arguing that decentralising pricing to branch managers lets the firm respond to a local competitor within days.
- Treating delayering as the removal of a whole level of management rather than as ordinary redundancy, and saying which level goes and who absorbs its work.
- Describing a tall structure by its many levels and narrow spans and a flat one by its few levels and wide spans, quoting the figures in the case where they are given.
- Explaining a matrix as dual reporting to a functional head and a project or product leader, with a concrete team drawn from marketing, finance and engineering.
- Drawing a consequence rather than restating a feature, for example that a flat structure lets a shop floor idea reach the board with only one approval in between.
- Noting that the appropriate shape depends on size, strategy and market pace, so structure follows the business rather than the other way round.
- Quantifying the gain where the evidence allows, for example the annual salary saving from removing a stated number of managers set against the one-off redundancy bill.
- Explaining a real drawback in context, such as spans becoming too wide to supervise or tacit knowledge walking out with long serving managers.
- Naming a change model and using it, for example Kotter and Schlesinger on participation and communication, and saying which approach the available time allows.
- Reaching a judgement that turns on the firm's objectives, its culture, the labour market and whether the saving is one-off or recurring.
- Defining empowerment as delegated decision making within agreed limits, not as extra duties handed over without the authority to act.
- Supporting one side with a named theory, for example Herzberg on responsibility as a motivator, and stating what that theory cannot explain.
- Arguing the case for tighter control in context, such as where mistakes are dangerous, output must be identical across sites, or staff are newly recruited.
- Judging on evidence from the business, including workforce skill, the competitive strategy and the cost of a wrong decision at the front line.
- Setting out explicit criteria for appropriateness, such as size, strategy, product range, geographic spread and the pace of change in the market.
- Applying those criteria to the named business rather than describing structures in the abstract.
- Showing that the same structure is judged differently by different groups, for example shareholders valuing lower overhead while employees value the promotion rungs a tall structure provides.
- Closing with a supported recommendation and the condition under which that recommendation would change.
Examiner Tips
- 💡Keep the vocabulary precise, because examiners reward the correct terms: span of control, chain of command, levels of hierarchy, delegation and centralisation.
- 💡The term normally introduces a sequence of questions on delayering or centralisation, so set the structural vocabulary up cleanly and reuse it.
- 💡If a redesign is proposed in the case, bring in resistance to change and Kotter and Schlesinger's ways of handling it, since structural change questions turn evaluative fast.
- 💡Meaning questions here are short, often worth a couple of marks: give one precise sentence plus a clause of application from the case, not a paragraph.
- 💡In longer answers these terms are the tools rather than the answer, so follow every definition with the words 'which for this business means'.
- 💡Span of control can be counted straight off an organisation chart in the evidence, so read the chart before you commit to calling the structure tall or flat.
- 💡Points are rewarded as point, link and application, so three developed sentences beat six unconnected assertions.
- 💡The case usually reveals the current structure through job titles and approval chains, so quote one before naming the structure.
- 💡Keep the categories separate: a flat business can still be functional, and a matrix can sit inside a tall hierarchy.
- 💡Evaluation credit comes from a supported judgement, so close by naming the drawback that matters most for this business and the reason it outweighs the rest.
- 💡The cost of change is usually a figure in the evidence, so use it rather than writing that restructuring is expensive.
- 💡If the case sets a deadline, argue for a faster change approach and accept openly the resistance that comes with it.
- 💡This normally appears as a high tariff evaluation, so plan two arguments each way plus a line of judgement before you start writing.
- 💡Let the evidence decide: the number of sites, the training budget and the complaints data all point one way or the other.
- 💡Saying what would have to change for your view to reverse is a reliable route into the top band.
- 💡Organise the answer either stakeholder by stakeholder or criterion by criterion, and keep the same order in the conclusion.
- 💡Weighing earns the marks, so use phrasing such as 'this matters more because' rather than stacking up the word 'however'.
- 💡Check the case for growth data; a firm that has doubled in size usually needs a different shape from the one it still has.
Common Mistakes
- Describing an organisation chart and stopping, so the answer never treats the shape as a choice with consequences for cost, speed and motivation.
- Using tall and flat as if one were simply better, when the right shape depends on the work, the skill of the staff and how fast the business must respond.
- Confusing span of control with chain of command, when span is how many people report to one manager and chain is the route authority travels down.
- Using authority and responsibility as synonyms, which loses the standard point that responsibility cannot be delegated away.
- Asserting that a tall structure must have a narrow span without checking the reporting numbers printed in the case.
- Confusing delegation with abdication, or describing empowerment as no more than giving staff extra work without extra discretion.
- Defining flat as 'no managers' and tall as 'lots of managers' without ever mentioning span of control or the chain of command.
- Listing matrix benefits generically without identifying who the two reporting lines actually belong to.
- Sketching an organisation chart and stopping there, when the credit is for characteristics and their effects rather than for the diagram.
- Treating delayering and downsizing as the same thing; delayering removes a level of management, downsizing simply cuts headcount anywhere.
- Writing two columns of advantages and disadvantages with no weighing, which caps the answer below the top evaluation band.
- Assuming morale must fall, when staff who gain autonomy may be more engaged; say whose morale falls and why.
- Assuming empowerment motivates everybody, when some employees experience open ended discretion as stress and prefer clear instruction.
- Blurring empowerment into delegation, so the answer never mentions the authority that makes the employee's decision stick.
- Writing a general essay about motivation instead of answering the specific choice the business in the case has to make.
- Listing stakeholders without saying what each one gains or loses from this particular structure.
- Assuming flat is modern and therefore better, which ignores businesses where close supervision is a legal or safety requirement.
- Ignoring the transition, when a structure can be right in the long run and still damaging to adopt in the current trading year.