IGCSE Business Studies revision notes for chapter 15

Important notes from chapter 15. This chapter covers business organizational structures.

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Revision Notes for Chapter 15
Keywords
1. Authority ­ the right to command and make decisions
2. Chain of command ­ the route through in which orders are passed down the
hierarchy
3. Delegation ­ authority to pass down from superior to subordinate
4. Formal organization ­ the internal organization of a business as shown on the
organizational chart
5. Hierarchy ­ the order or level of responsibility in the business
6. Organizational chart ­ the diagram which shows different levels of
responsibility in the business
7. Span of control ­ the number of people a person is directly responsible for
8. Subordinate ­ people who work under the control of a senior worker
Types of structure
Flat structure: This is when there are fewer links in the chain of command.
This means that communication will be easier, cost of management will be
lower, and communication problems are less common.
Tall structure: This is when there are many links in the chain. This means that
communication tends to be more difficult and less friendly compared to flat
structure, and there are more management costs. However there might be a
clear route for promotion, which helps to motivate workers.

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