Which one of the following is most likely to be found in a business with a flat organisational structure?
A Many levels of hierarchy
B A long chain of command
C A wide span of control
D All decisions are made at head office
(b)
Explain one disadvantage for a business of having a long chain of command.
(c)
State and explain two reasons why a business may decide to use delayering.
Question 2
12 marks
Item A: Larkmead Garden Centres Ltd
Abigail Okonjo is the managing director of Larkmead Garden Centres Ltd. The company owns eight garden centres in the south west of England and employs 240 staff. Each garden centre has a centre manager. Below each centre manager there are four supervisors (plants, café, home and gifts, and deliveries), and each supervisor is directly responsible for between five and eight sales assistants. All eight centre managers report directly to Abigail.
All selling prices, staff rotas and orders to suppliers are decided by Abigail at the head office in Exeter. Centre managers must email head office for approval before spending more than £100, and they say a reply can take up to a week. One centre manager could not reduce the price of bedding plants during a wet bank holiday weekend, and the plants were later thrown away.
In exit interviews, several supervisors who left said they had "no say in anything".
Only the supervisors at centre 1 are shown. Every centre has the same structure.
Table 1: Staff turnover among Larkmead's supervisors
Year
Staff turnover
2022
9%
2023
14%
2024
21%
(a)
All eight centre managers report directly to Abigail.
Explain one drawback for Larkmead Garden Centres Ltd of Abigail having a wide span of control.
(b)
Explain how the centralisation of decision making affects Larkmead Garden Centres Ltd.
You should use information in Item A in your answer.
(c)
Abigail is thinking about delegating more decisions to her centre managers.
Analyse two benefits for Larkmead Garden Centres Ltd of delegating more decisions to its centre managers.
Question 3
9 marks
Answer all parts of this question.
(a)
Which one of the following describes delayering?
A The number of employees a manager is directly responsible for.
B The removal of one or more levels of the hierarchy from a business.
C The passing down of authority from a manager to a more junior employee.
D Decision making being kept at the head office of a business.
(b)
Explain the meaning of the term 'delegation' using an example.
(c)
Explain one drawback for a business of having a tall organisational structure.
(d)
State and explain two reasons why a business may decide to decentralise its decision making.
Question 4
9 marks
This question is about organisational structures. You do not need to refer to a particular business in your answers.
(a)
Which one of the following is a feature of a decentralised business?
A All major decisions are made by senior managers at Head Office.
B Decision making is passed down to managers of local branches.
C The business has removed a level from its hierarchy.
D Every manager is responsible for a larger number of employees.
(b)
Explain one advantage for a business of having a narrow span of control.
(c)
Explain the meaning of the term 'chain of command' using an example.
(d)
State and explain two advantages for a business with branches in several towns of centralising its decision making.
Question 5
12 marks
Item A: Hartcombe Farm Shops Ltd
Hartcombe Farm Shops Ltd (HFS) is a private limited company with eight farm shops in North Yorkshire. It employs 260 staff. Siobhan Byrne is the Managing Director and works at Head Office in Harrogate.
All decisions about which foods and other products to buy, what prices to charge and which suppliers to use are made by a buying department at Head Office. Head Office has negotiated contracts with three large suppliers, which give HFS a 15% discount for ordering in bulk for all eight shops. Shop managers follow a detailed company handbook and send a weekly sales report to Head Office.
Table 1: Organisational structure of HFS
Level of hierarchy
Job title
Number of employees
1
Managing Director
1
2
Head Office department heads
4
3
Shop managers
8
4
Section supervisors
32
5
Sales assistants and butchers
215
Several shop managers have complained that fresh foods popular with local customers are often out of stock, and that it takes three weeks for Head Office to approve a change to an order. All eight shop managers were promoted from supervisor jobs within HFS and none of them has ordered stock before. Siobhan is considering allowing shop managers to choose some of the fresh food ordered for their own shop.
(a)
Explain one benefit to HFS of all shop managers following a detailed company handbook.
(b)
Explain one way in which the chain of command at HFS affects communication within the business.
You should use information in Item A in your answer.
(c)
Siobhan is considering allowing shop managers to choose some of the fresh food ordered for their own shop.
Analyse two drawbacks for HFS of this decentralisation of buying decisions.
Question 6
9 marks
Answer all parts of this question. You do not need to refer to a specific business in your answers.
(a)
Which one of the following is the meaning of the term 'span of control'?
A The number of levels in the hierarchy of a business
B The number of employees a manager is directly responsible for
C The passing of authority from a manager to an employee
D The route by which instructions are passed through a business
(b)
Identify two features of a flat organisational structure.
(c)
Explain one benefit to a business of delegation.
(d)
State and explain two ways in which delayering could affect communication within a business.
Question 7
5 marks
(a)
Figure 1 shows the organisational structure of a business.
Which one of the following describes the organisational structure shown in Figure 1?
A Flat B Tall C It has a narrow span of control D It has a long chain of command
(b)
Using Figure 1, state the span of control of the manager.
(c)
Which one of the following describes a centralised organisational structure?
A Decisions are taken by managers at head office B Decisions are taken by employees in local branches C The business has few layers in its hierarchy D The business has a wide span of control
(d)
Explain one disadvantage to a business of having a centralised organisational structure.
Question 0
19 marks
Item A: Tavenor plc
Tavenor plc designs and manufactures smart heating controls that are sold in 22 countries. It employs 2 400 people: 300 at its head office in Bristol and the rest in its factories in Poland and Vietnam.
In 2024, chief executive Marta Rowe decided to remove two layers of management, giving Tavenor a flatter organisational structure. Forty-five middle manager posts were cut, and smaller factory teams were merged into larger ones. Team leaders in the factories now report directly to one of Tavenor's four directors, and the average span of control of a team leader has risen from 6 employees to 15 employees.
Team leaders have also been given the authority to approve spending of up to £5 000 without asking a director, and to order materials themselves. Tavenor spent £180 000 training team leaders for these new responsibilities.
Marta Rowe says that instructions now reach factory staff far more quickly than before. However, several team leaders have complained that they are working longer hours and have less time to spend with each member of their team.
Item B: Tavenor plc
Marta Rowe is considering creating 60 new deputy team leader posts, at a cost of £28 000 a year each, so that team leaders have more time to spend with their teams.
(a)
Explain one benefit to Tavenor of having a flatter organisational structure.
(b)
Using Item A, calculate the percentage increase in the average span of control of a team leader at Tavenor.
Show your workings.
(c)
Analyse two drawbacks to Tavenor of removing two layers of management from its organisational structure.
(d)
Recommend whether Tavenor should create the 60 deputy team leader posts.
