A LevelBusinessAQAExam Questions6. Human Resource Management6.3 Organisational Design

Organisational Design (AQA A Level Business): Exam Questions

Exam code: 7132

53 mins5 questions
1
9 marks

Case Study

WWH Ltd

WWH Ltd manufactures and sells a single model of wood-burning stove. Rising energy prices mean that gas and electric heating is expensive to run. Wood-burning stoves are a cheaper and increasingly popular alternative source of heating in homes. This has led to an increase in demand for WWH Ltd’s wood-burning stoves. WWH Ltd is profitable and owns its buildings.

WWH Ltd uses demand forecasts to estimate how many wood-burning stoves to make. Once manufactured, the stoves are stored in WWH Ltd’s warehouse until they are needed. When a customer places an order, they pay a 25% deposit and the remaining 75% when the stove is fitted in the customer’s home. The production department has been able to increase manufacturing to keep up with the growing demand. However, lead time for fitting by WWH Ltd’s expert fitters has been increasing and is currently two months.

Looking to the future, WWH Ltd’s directors are concerned. The government has introduced legislation to set environmental standards for wood-burning stoves. News media continue to run stories that the sale of wood-burning stoves may be banned completely in the future. This uncertainty means that banks are not willing to lend WWH Ltd any more money.

Up until now, WWH Ltd’s directors have seen the focus on a single product as a strength which has allowed them to keep a simple organisational design:

  • no need for research and development and new product development

  • functional structure with department responsibilities unchanged since the business set up

  • relatively flat structure which helps to keep costs under control.

Now, the directors want to grow the business and are considering recruiting more staff and developing a portfolio of new products. Developing newer models of wood-burning stoves may enable WWH Ltd to keep ahead of ever-increasing government environmental standards. Alternatively, developing unrelated products could reduce dependence on a market with increasing government regulation.

WWH Ltd’s directors are considering making and selling a portfolio of products rather than a single product, in order to increase growth.

Analyse how WWH Ltd’s organisational design may change if the directors decide to do this.

How did you do?

2
9 marks

Analyse how widening a manager’s span of control might affect labour productivity within the department she manages.

How did you do?

3
1 mark

The two statements below refer to Hackman and Oldham’s model of job design. According to this model, employee performance will be improved by:

Statement 1: ‘constant feedback on performance.’

Statement 2: ‘each employee focusing on the task in which they excel most.’

Read statements 1 and 2 and select the correct option from the following options.

  • Statement 1 is true. Statement 2 is true.

  • Statement 1 is true. Statement 2 is false.

  • Statement 1 is false. Statement 2 is true.

  • Statement 1 is false. Statement 2 is false.

Choose your answer

4
9 marks

Case Study

Galin plc

Galin is a large multinational company that sells products in 10 different categories, including fabric care (eg washing powder), home care (eg furniture polish) and hair care (eg shampoo) products. It has 50 different brands and in 2018 achieved global sales of $60 billion.

Galin has chosen to have a regional organisational structure, dividing the world into six regions: North America, Europe, Asia, Latin America, the Middle East and Africa. There are major differences between these regions: for example, in terms of market conditions, labour markets and economic factors.

In 2018 Galin invested 3% of its sales revenue into research and development (compared with an industry average of 1%) and owned 55 000 patents. Its new products achieve high profit margins. When developing products, Galin encourages collaboration between people in different jobs.

An objective of the company for 2019 is to increase labour productivity.

Analyse why Galin has chosen a regional organisational structure rather than a functional one.

How did you do?

5
25 marks

A business wants to increase the productivity of its workforce.

To what extent is the greater use of delegation likely to be an effective way for the business to achieve this?

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