Different Organisational Structures (OCR GCSE Business): Revision Note

Introduction to organisational structure

• An organisational structure outlines the reporting relationships, roles, and responsibilities of employees 

• Businesses need to choose a suitable structure to enable them to effectively implement ideas and achieve their objectives

  • They should consider how the structure may affect the management and effectiveness of operations and communication

  • A well-designed organisational structure helps to provide clarity, efficiency and accountability

Organisational structure: key terminology

Tall structures

• A tall organisational structure has a long chain of command and a narrow span of control

  • Tall structures have multiple levels of management 

  • They are common in large organisations with complex operations

    • E.g. Government agencies and universities

A tall organisational structure

Evaluation of tall structures

Flat structures

• Flat structures have a short chain of command and a wide span of control

  • Flat structures have few levels of management 

  • They are common in small organisations or start-ups

    • E.g. Tech start-ups and small businesses

A flat organisational structure

Evaluation of flat structures

Why businesses have different structures

• Businesses choose different organisational structures for a range of reasons

The size of the business

• Small businesses are likely to have loose, flat structures

  • Workers often fulfil a range of roles

  • The owner is likely to work closely with workers at all levels, with little attention to hierarchy

• Larger businesses often adopt a more complex, hierarchical structure

  • This is required to coordinate all the employees in departments or in different locations effectively

The industry in which it operates

• Different industries have different operational needs

  • E.g. A manufacturing company may require a clearly defined, tall hierarchy, while a technology start-up business may thrive with a flatter, more flexible arrangement

The business objectives

• Businesses objectives can influence the choice of structure

  • Businesses that focus on innovation may decentralise decision-making and adopt a flat structure

  • Those whose objectives focus on improving efficiency may adopt a tall structure that maintains tight control

• In many cases, a business's structure evolves over time, with layers of hierarchy added or removed (delayering) according to its needs

  • Businesses that integrate with others often combine organisational structures, though redundancies due to duplication of jobs is common