1.4.3 - Advantages and Disadvantages

Advantages of a tall structure

• Employees are more supervised as managers have a short span of control, resulting in higher higher quality output

• Loads of promotional prospects due to the long chain of command which can motivate employees to work hard and remain in the business

• In a tall structure, each employee has a specific and well defined role, meaning that they focus on one or two specific tasks. This means that they will be more skilled and productive in their jobs

Disadvantages of a tall structure

• Decision making is slower due to information flowing slowly through the long chain of command and layers of management, potentially leading to missed opportunities

• The business will have higher administrative costs due to more layers of management who have higher salaries, potentially reducing profitability

• Employees have little decision making power as authority rests in higher management, causing low morale and demotivation

Advantages of a flat structure

• Fewer layers means that decisions and information reach employees quickly, allowing a business to respond rapidly to market changes

• There are lower operational costs due to fewer levels of management, resulting in higher profitability

• Employees have more control over their work and decision-making, leading to increased job satisfaction and motivation

Disadvantages of a flat structure

• Employees may have unclear roles or overlapping responsibilities due to being less supervised, which may result in duplication of work and inefficiencies. This is especially true for larger businesses

• Fewer management levels means fewer opportunities for promotions, which may demotivate employees

• Managers have larger spans of control, which may cause them to become burn out, leading to delayed decision making and poor strategic planning

Advantages of a matrix structure

• Better collaboration as employees work across different teams which encourages communication between departments, leading to faster problem solving

• Very flexible as staff from different departments can jump to and from different roles, allowing businesses to quickly capitalise on market changes

• Both project and functional managers oversee the creation of the products and can request changes that align with customer needs, making it a more market-driven strategy

Disadvantages of a matrix structure

• Conflicts between functional and project managers trying to satisfy different objectives may slow down decision making

• It is costly to implement a matrix structure due to higher managerial costs and the training required for employees to build clear communication strategies and understanding of their roles