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A LevelBusinessAQARevision Notes6. Human Resource Management6.3 Organisational DesignThe Value of Changing Organisational Design

The Value of Changing Organisational Design (AQA A Level Business): Revision Note

Exam code: 7132

Steve Vorster

Written by: Steve Vorster

Reviewed by: Lisa Eades

Updated on

Why change the organisational design?

  • When there is a change in external factors (market conditions, technology advances, or changes in legislation), businesses may need to reassess their current structure

  • An adaptive organisation will be able to change their structure in response to external factors, or build an organisational structure which is easily able to handle external changes

Influences on organisational structures

Reason

Explanation

Example/Impact

Improve efficiency

  • Delayering or streamlining can remove unnecessary management levels, improving communication and cutting costs

  • A flatter structure enables faster decisions, reduces wage costs, and improves accountability

Respond to growth or change

  • As businesses grow into new markets, regions, or product lines, the structure must adapt to support increased complexity

  • A decentralised structure may give regional teams more autonomy to respond locally

Increase innovation

  • Cross-functional collaboration through structures like matrix teams encourages fresh ideas and agile problem-solving

  • A technology firm may form temporary project teams for new app development or product launches

Adapt to external pressures

  • Structural changes help businesses respond to evolving technology, customer expectations, economic shifts, or competition

  • Retailers like Next have restructured to focus more on online operations and less on in-store hierarchy

Align structure with strategy

  • A business’s structure must reflect its strategic goals to ensure staff roles and responsibilities support direction

  • A business going digital may shift from a functional to a project-based structure to deliver new services faster

  • The appropriateness of an organisational structure depends on the context and unique characteristics of each business

  • Factors such as organisational culture, leadership style and employee capabilities should also be taken into account when selecting and implementing a new organisational structure

Example: Marks & Spencer

  • Problem: M&S faced falling profits and customer dissatisfaction

  • Response: It restructured by removing management layers and shifting more decision-making power to store-level staff

  • Result: Improved responsiveness to local demand and a leaner cost base

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    Author
    Reviewer
    Steve Vorster

    Author: Steve Vorster

    Expertise: Economics & Business Subject Lead

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.

    Lisa Eades

    Reviewer: Lisa Eades

    Expertise: Business Content Creator

    Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.