Business studies - organisational structure

what does Hierarchy refer to

the level of authority within an organisation

what is chain of command

the line of authority that flows downward from top management to lower-level employees

what does span of control refer to

the number of employees that a manager manages

what is a centralised organisation structure

when authority for decision making rests with senior management

what is a decentralised organisation structure

when authority for decision making is delegated down the hierarchy

what are the advantages of a centralised organisation structure

1. effective co-ordination and control

2. fast and decisive decision making - increased competitiveness

3. consistency

what are the disadvantages of centralised organisation structure

1. lack of authority can impact motivation

2. ignores insights of lower level staff who may be closer to the customer

what are the advantages of decentralised organisation structure

1. better able to respond to local market conditions

2. staff able to contribute to decision making so may be more loyal

3. prepares junior management for career progression

what are the disadvantages of decentralised organisation structure

1. diseconomies of scale results from duplication of staff roles

2. may be difficult to tightly control budgets

3. during times of crisis, leadership may be unclear