Organisational Structure (A Level) (Cambridge (CIE) A Level Business): Flashcards

Span of control is the number of employees that a manager or supervisor effectively manages.

The chain of command is the formal line of authority that flows down from top management to lower-level employees.

False.

A wider span of control means fewer layers of management, so the structure is flatter.

Hierarchy is the number of layers of management and supervision within an organisation.

Employees are grouped into functions that fulfil particular roles, such as finance, human resources or marketing, according to their expertise.

Functional areas may focus only on their own area of responsibility and lose touch with the objectives of the business as a whole. This can lead to a lack of coordination.

A tall structure is more centralised, and decisions can be slow because information passes through multiple layers of management. A flat structure is more decentralised, so decisions can be faster.

Tall structures offer more opportunities for career advancement within the organisation.

True.

With fewer levels of management, employees may take on multiple roles and responsibilities, which can lead to burnout and role ambiguity.

A matrix structure combines the functional areas of a business with specialist teams built around specific products or projects.

When multiple managers are involved, employees may face confusion over roles and responsibilities. It can also cause conflicts over priorities and resources.

The business is split into divisions based on products or product lines, and each division handles its own marketing, operations and finances.

False.

Each division has its own teams, which can cause duplication of resources and needs more managers and skilled staff, so costs increase.

Decisions are made closer to local markets, so the business can respond quickly to local trends, laws and competition and improve customer satisfaction.

Delayering is removing layers of management to make the business structure flatter, which can reduce costs and improve communication.

Retrenchment is when a business shrinks its structure due to falling profits, removing functions or jobs to cut costs.

Delegation occurs when responsibility for specific tasks is given to subordinates by managers, usually involving a transfer of authority.

True.

In a flat structure, managers have a wide span of control, so they do not have time to complete every task themselves.

Accountability means an individual has the responsibility to report on and explain their actions fully and honestly.

Accountability needs clear expectations, an employee with appropriate skills, training and experience, effective communication and feedback, and clear consequences linked to performance.

Delegation provides a form of training for workers as they learn on the job, increasing their chances to progress within the organisation.

It allows managers to concentrate on important tasks and helps them measure the performance of their staff.

Workers may feel stressed, unprepared or unsupported when given more complex tasks. They may also not receive credit for their efforts, which can be demotivating.

Authority is the right or power to give orders, make decisions and control resources. Responsibility is the duty to complete a task or meet a target.

False.

A manager may delegate authority and responsibility, but ultimate responsibility stays with the manager, who remains accountable overall.

Too much authority with too little responsibility can lead to misuse of power. Too much responsibility with too little authority can lead to frustration and failure to complete tasks.

Workers can feel micromanaged, which reduces their morale and limits their initiative.

False.

Too much trust without enough control means the manager may lose oversight and miss early signs of problems. This can lead to errors, missed deadlines or a lack of accountability.

The employee may become afraid to try again, which limits their growth, prevents skill development and creates dependence on the manager.

A centralised structure is one where decision-making authority is concentrated at the top of the organisation, with senior managers making most decisions.

Decisions are made by a small group of managers, which ensures a consistent approach in all areas of the business.

True.

In urgent situations, central leadership can act fast without waiting for input from others.

In a centralised structure, day-to-day decisions can be slow because local managers must wait for approval.

Staff may feel demotivated if they are not trusted to make decisions or give ideas.

A small group of people must make many decisions, which can lead to overload or errors.

Decentralisation is when decision-making is spread out across different levels of the business, so lower-level managers or local branches can make decisions without always referring to head office.

Local teams understand their customers and markets better, so they can adapt accordingly.

False.

Decentralisation creates high training needs, because staff need proper training and support to make confident and informed decisions.

Different branches or teams may take different approaches, which could confuse customers or harm the brand.

Decentralisation reduces the workload of senior managers, allowing them to focus on strategic planning.

Less experienced staff may make mistakes without proper guidance or oversight.

A line function is a department or role that is directly involved in achieving the core objectives of the business, typically related to production, sales or operations.

A staff function is a department or role that provides advice, support or specialist services to line departments but is not directly involved in core operations.

False.

Human resources and finance are usually staff functions because they support the departments that make the product or deliver the service.

Line functions drive the business, while staff functions enable it to run smoothly.

Conflict can arise from differences in perspective, poor communication or unclear roles.

Support departments may give advice, but line managers may ignore it if they prefer to act on their own judgement.

True.

This lack of understanding of production or customer-facing roles can lead to unrealistic suggestions, such as budget limits that ignore urgent production needs.

Line functions focus on immediate results, while staff functions may focus on long-term strategy or legal compliance.

Conflict from perceived interference arises when line managers feel that support departments are stepping into their responsibilities.

Poor communication can lead to confusion or delays, for example when a support department changes a system without informing the sales team.