BUSS4 - Absolute Minimum; what you need to know for Sect. A and B

  • Created by: Kat
  • Created on: 19-06-13 21:52

Section A: Prelim. Material - research ORGANISATIONAL STRUCTURES in businesses


Larger businesses may choose to use:

Traditional hierarchy

Matrix Structues

Informal Structures

 Choosing these depends on:

- Level of skill of employees

- Business environment (eg. amount of competition)

- Desire to move away from risk taking culture; more quality than innovation; then they may become more highly structured

- Leadership styles* of senior executives

Impacts on competitiveness:

- Ability to make quick decisions

- Efficient operation at minimum cost

- Effectiveness of channels of communication

- Identity of those involved in the decision making process



- Limits number of people in the decision making process (only a few snr. executives)


- Quick decisions

- Good day-to-day running and financial control

- Standardised proceedures can be set

- Good crisis management


- Lack of creative decisions

- Bureaucracy

- Diseconomies of scale


- Broadens the span of control and delegate to younger / more inexperienced management (arguably unavoidable as a business grows)


- Senior management focus more on making corporate decisions than menial decisions

- Subordinates have increased motivation (thus decreased absenteeism, increased productivity & quality of goods/sales)

-  Day-to-day problems resolved arguably more quickly, because channels of communication are shorter

- Increases flexibility (can manage changing market conditions)

- Middle and junior managers are more prepared for future senior roles


- Slower strategic decision making

- More difficult to control business finances / budgets

- More difficult to monitor economies of scale

- Leadership and direction is hard to maintain


Removing layers in a hierarchical structure to make the organisation more lean and efficient.


- Costs are removed when high salaried staff are removed

- Motivation of employees should improve- as they have more control over their work

- Delegating authority means that those with less power will be able to have more of an influence into the decisions of a business, so a business may be better at adapting to changes in environment


- Valuable market knowledge and experience may be lost; and loss of job security decreases motivation

- Legislation bans discrimination against age, so it may be difficult to hire more experienced staff or fire older staff

- Workload of managers is likely to increase and, in turn, perhaps demotivation. This means that there could be increased absenteeism rates due to stress

Flexible workforces:

More of the workforce is part-time or temporary (peripheral); which means that they don't have any rights to sick pay, holiday pay or pensions. (LESS IMPORTANT)


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