Organisational design — Edexcel A-Level Business
Test yourself on Organisational design with PEARSON EDEXCEL A-Level practice questions.
7 days Premium · Then free forever · No card, no charge
Organisational design explained
These four ideas describe one thing: who is allowed to decide what.
Read the full explanation
Levels of authority stack the business up, the route an instruction travels down those levels is the chain, the number of people reporting directly to one manager measures how wide that manager's reach is, and where decision power actually sits, at head office or out in the branches, is the final choice. A wide reach means fewer layers, lower management cost and real delegation, but thinner supervision and a manager stretched past what one person can watch. Holding power centrally buys consistency, purchasing economies and speed in a crisis, while pushing it outwards suits local markets and develops the next generation of managers. Greiner argues growth itself forces that shift once founders can no longer decide everything.
b) Types of structure: tall; flat; matrix
A tall shape stacks many layers with few reports each, which gives close supervision and a visible promotion ladder but slows messages and loads the payroll with managers. A flat shape strips layers out, so decisions move quickly and cost less to administer, at the price of overloaded supervisors and fewer rungs to climb, which removes the advancement Herzberg counts as a real motivator. A matrix keeps the functional home and adds project teams, so an engineer answers to a department head and a project leader at the same time. It suits aerospace and pharmaceutical work where a launch needs several specialisms at once, and it fails where the two bosses want different things on the same morning and nobody arbitrates between them.
c) Impact of different organisational structures on business efficiency and motivation
The chart only matters through what it does to two numbers and one feeling. Efficiency shows up as labour productivity, found by dividing total output by the number of employees, as unit cost, and as the time a decision takes to reach the shop floor. Stripping layers lifts all three when the remaining managers can cope, and damages all three when spans stretch past what one person can supervise. Motivation moves through responsibility, recognition and advancement, which is why removing a management tier raises commitment in one firm and guts it in another that has just deleted every promotion rung. Test the claim against evidence a business really collects, absence, labour turnover and output for each worker, and remember no chart shows the informal network where much of the work is done.
Your focus
- a) Structure: hierarchy; chain of command; span of control; centralised and decentralised
- b) Types of structure: tall; flat; matrix
- c) Impact of different organisational structures on business efficiency and motivation
Organisational design exam tips
Marking Points
- Defines span of control as the number of subordinates reporting directly to one manager, and keeps it separate from the chain of command, which is the line authority travels along.
- Links the design to cost and speed, since fewer layers cut management salaries and shorten communication while more layers add supervision and promotion steps.
- Applies the centralised or decentralised choice to the case, for example a chain that needs one brand standard against a business serving genuinely different local markets.
- Evaluates with a named model such as Greiner on growth crises or Handy on culture, and says what the model cannot see, for instance the calibre of the individual managers.
- Describes each shape by its layers and spans and says what that does to communication speed, supervision and management cost.
- Identifies the matrix by its dual reporting to a function and a project, and names the cross functional gain for innovation or a product launch.
- Applies the shape to the business in the case, using clues such as the number of sites, the pace of change and how standardised the work is.
- Evaluates honestly, noting that delayering saves salaries once but can leave the remaining managers unable to supervise properly, so the gain fades.
- Names the efficiency measure being affected, such as labour productivity, unit cost or the speed of a decision, and states the formula where one exists.
- Explains the motivational route through a named theory, for example Herzberg on responsibility and advancement or Mayo on belonging to a team, rather than asserting that staff will feel happier.
- Applies both strands to the named firm, using its size, the nature of the work and any figures given for absence, turnover or output.
- Evaluates the limits, noting that a chart says nothing about culture, informal influence or the quality of the managers who remain after a change.
Examiner Tips
- 💡If the stem gives employee and manager numbers, work out the average span and comment on whether that is wide or narrow for this kind of work before judging it.
- 💡Structure questions are really about a consequence, cost, speed, control or motivation, so name the consequence in the first line of each paragraph.
- 💡Keep the judgement conditional, since the right degree of central control depends on how similar the firm's markets and products are.
- 💡The question usually asks for the impact of a change of structure, so write about what changes for this named firm rather than about structures in general.
- 💡Use the organisation chart or headcount in the extract to justify calling the structure tall or flat before you start judging it.
- 💡Bring in the cost of the change itself, since restructuring disrupts output for months and that belongs in the evaluation.
- 💡This is prime ground for the longer evaluation questions, so build each paragraph around one consequence and close with a judgement that depends on the firm's circumstances.
- 💡Use any productivity, absence or turnover figure in the extract as evidence rather than decoration, and say what a good value would look like in that industry.
- 💡Say what would have to be true for your judgement to change, since that is what separates a supported conclusion from an assertion.
Common Mistakes
- Mixing up span of control and chain of command, or counting everyone below a manager instead of only the direct reports.
- Assuming delegation always motivates, when a branch manager handed responsibility without budget or training is simply overloaded.
- Writing about structure in the abstract when the extract prints an organisation chart that should be read, quoted and used as evidence.
- Calling any structure with a few levels flat without reference to the span of control, which is what actually defines the shape.
- Treating delayering as a pure saving and ignoring redundancy payments, lost experience and the blocked career path left behind.
- Praising the matrix for teamwork without mentioning the conflicting instructions, duplicated meetings and slower decisions it brings.
- Assuming a flatter design motivates everybody, when staff who valued a clear promotion path are exactly the ones who leave.
- Treating efficiency and motivation as the same thing, so an answer claims productivity rises because morale rises with no mechanism in between.
- Ignoring the disruption of restructuring itself, when output normally dips while new roles and reporting lines are being learned.