Podcast
Questions and Answers
What is the primary purpose of a business hierarchy?
What is the primary purpose of a business hierarchy?
- To eliminate the need for management
- To establish ranking based on status and authority (correct)
- To create informal communication channels
- To encourage horizontal movement among employees
In a chain of command, complaints always flow downwards.
In a chain of command, complaints always flow downwards.
False (B)
What does the term 'span of control' refer to?
What does the term 'span of control' refer to?
The number of subordinates a manager is responsible for.
A business with many subordinates under one manager will have a ___ hierarchy.
A business with many subordinates under one manager will have a ___ hierarchy.
Which of the following describes decentralisation in a business?
Which of the following describes decentralisation in a business?
Match the terms with their definitions:
Match the terms with their definitions:
A wide span of control generally results in a tall hierarchy.
A wide span of control generally results in a tall hierarchy.
What is the primary disadvantage of a tall hierarchy?
What is the primary disadvantage of a tall hierarchy?
What is the primary characteristic of centralisation in an organisation?
What is the primary characteristic of centralisation in an organisation?
Decentralisation allows lower levels of management to make key decisions.
Decentralisation allows lower levels of management to make key decisions.
Where are recruitment and account decisions carried out in a centralised organisation?
Where are recruitment and account decisions carried out in a centralised organisation?
In decentralisation, divisions manage their own ________ and make relevant decisions.
In decentralisation, divisions manage their own ________ and make relevant decisions.
Match the following terms with their descriptions:
Match the following terms with their descriptions:
What significant advantage does decentralisation provide in dynamic markets?
What significant advantage does decentralisation provide in dynamic markets?
Branches can make major decisions under a centralised structure.
Branches can make major decisions under a centralised structure.
Which division holds its own budget when decentralised?
Which division holds its own budget when decentralised?
Flashcards
Hierarchy
Hierarchy
A system in an organization where employees are ranked based on their status and authority.
Chain of command
Chain of command
The flow of information, power, and authority through an organization.
Span of control
Span of control
The number of subordinates a manager is responsible for.
Tall hierarchy
Tall hierarchy
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Flat hierarchy
Flat hierarchy
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Decentralisation
Decentralisation
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Centralisation
Centralisation
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Subordinate
Subordinate
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Centralisation
Centralisation
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Decentralisation
Decentralisation
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Centralisation: Advantages
Centralisation: Advantages
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Centralisation: Disadvantages
Centralisation: Disadvantages
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Decentralisation: Advantages
Decentralisation: Advantages
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Decentralisation: Disadvantages
Decentralisation: Disadvantages
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Centralized decisions
Centralized decisions
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Decentralized decisions
Decentralized decisions
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Study Notes
Structure in Business
- Hierarchy: A business structure where employees are ranked according to status and authority. Higher levels traditionally hold more importance and authority than lower levels. Employees often seek upward movement in hierarchy to increase salary and improve working conditions.
Chain of Command
- Flow of Information and Authority: The chain of command outlines the flow of information, power, and authority in a business. Those at higher levels have greater power and authority.
- Delegation: Higher levels delegate tasks to lower levels in the hierarchy.
- Flow of Communication: Complaints and status reports flow up the chain, while orders flow down. Both should be handled at the lowest possible level in the chain.
Span of Control
- Defined Number: Span of control represents the number of subordinates a manager is responsible for.
- Example: A Head of Department in a school might have 6 teachers reporting to them, therefore their span of control is 6.
- Subordinate Delegation: This number defines how many subordinates a manager can effectively delegate to.
- Hierarchy and Specialization: Small spans of control often lead to taller hierarchies and highly specialized jobs.
- Flat Structure and Responsibility: Large spans of control result in flatter hierarchies and greater responsibility for employees
Decentralisation and Centralisation
- Decentralisation: A business structure where the organization is divided into areas (e.g., North, South, East, West; UK, Europe, Africa) and each area has its own budget.
- Centralisation: A business structure where the organization's management and administration are concentrated in one central head office. All areas share one central budget.
- Geographic Decentralisation: Business divisions operating in different geographical locations without a single head office.
- Centralisation Decisions: Key decisions are made at the central head office.
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