Lecture notes
Lecture notes The Businesss Environment Cambridge Technicals Level 3 Business, ISBN: 9781471874796
This talks about all organizational structures and their various advantages and disadvantages.
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Key Terms● Span of Control- The number of subordinates a supervisor directly manages
● Chain of command - The path through which messages and instructions are passed
from the top of the organisational structure to the bottom
● Delegation- The passing of authority to lower levels in the organisational structure
● Authority- The power or control that employees have over decision making
● Accountability- The responsibility that someone has for actions that are carried out
● Flat Structure
There are very few layers between the top level and the bottom level. The chain of command
is short and the span of control tends to be wide. This is best suited for smaller businesses
with fewer job roles and division of functions unnecessary.
Advantages Disadvantages
Fewer management levels keep staff costs The wider span of control may mean that
down, improving efficiency employees at the bottom level are not
supervised closely, which could lead to
mistakes
Due to the wide span of control employees Fewer levels reduce the opportunities for
are empowered and motivated to make promotion, which might cause more
decisions. ambitious employees to leave
Authority is delegated to employees so
decisions can be made more quickly as
information and orders are more direct
Due to the short chain of command,
communication flow tends to be good.
Information can be passed on more
accurately and there is generally more
interaction between the top and bottom
levels, improving understanding
, ● Tall/Hierarchical Structure
Many layers of management, resembling a pyramid with fewer people at the top than
the bottom. The chain of command is clearly defined, instructions are passed down
from the top to the bottom. At each level, there is a person in charge of several
people. There is usually a clear division of functions, e,g finance, marketing, human
resources, operations management. Directors and managers with specialist skills
and expert knowledge are appointed to ensure each function is run smoothly. It is
suitable for medium to large businesses with a large number of employees and the
armed forces.
Advantages Disadvantages
Everybody knows their job roles and to Responses to problems can be slow as
whom they are accountable information passed down from one level
to the next
At each level, authority is delegated Whilst authority can be delegated,
from above so that employees are responsibility cannot. People higher up
empowered to make decisions on their the hierarchy are responsible for the
areas of work. Decisions can be made actions of those under them even if they
quickly which speeds up the response didn’t make the decisions. This has
to problems. implications for the selection and
training of employees before authority is
delegated to them.
A narrow span of control enables Communication can be poor due to the
supervision to be closer, leading to long chain of command; information can
fewer mistakes. get distorted as it travels up and down
the hierarchy.
Offers more opportunities for promotion, Different departments can compete and
so employees may be more motivated make decisions that do not benefit the
to work harder whole business.
Middle management can specialise,
increasing business efficiency
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