Well-designed structures provide clarity, efficiency, and accountability.
Key Terminology
Hierarchy: Levels of authority in an organisation, ranking positions from top to bottom.
Higher positions hold more authority.
Includes top-level, middle-level, and lower-level management.
Chain of Command: Formal line of authority flowing downward, defining reporting and decision-making responsibilities.
Span of Control: Number of employees a manager directly oversees.
Narrow span: More management layers.
Wide span: Fewer management layers.
Centralisation: Control by senior managers; typically a tall structure.
Decentralisation: Control spread across the organisation; often a flat structure.
Delegation: Assigning authority to others for specific tasks.
Types of Structures
Tall Structures
Characteristics:
Long chain of command and narrow span of control.
Multiple management levels.
Common in large organisations (e.g., government agencies, universities).
Advantages:
Clear structure of authority.
Promotes specialisation and expertise.
Opportunities for career advancement.
Disadvantages:
Communication barriers.
Slow decision-making.
Potential bureaucracy.
Flat Structures
Characteristics:
Short chain of command and wide span of control.
Few management levels.
Common in small organisations or start-ups (e.g., tech start-ups).
Advantages:
Encourages collaboration and open communication.
Faster decision-making.
Promotes creativity and innovation.
Disadvantages:
Undefined roles may cause confusion.
Employees may face multiple responsibilities leading to burnout.
Reasons for Different Structures
Size of the Business
Small Businesses: Usually have flat structures, with versatile roles and direct interaction between owner and employees.
Large Businesses: Require complex, hierarchical structures for effective coordination.
Industry Requirements
Different industries have varying structural needs.
Manufacturing may need a tall hierarchy.
Tech start-ups may prefer flat, flexible arrangements.
Business Objectives
Objectives influence structural choice.
Innovation-focused businesses may prefer decentralised, flat structures.
Efficiency-focused businesses may opt for tall, controlled structures.
Structures evolve over time due to growth or integration, sometimes resulting in delayering or redundancy.
Examiner Tips
"Explain" questions in exams require a point and development, often in context.
Example answer: "An internal structure allows a business to organise its workers [1] so they know their roles in relation to others in this large organisation." [1]