Flat vs. Tall Organisational Structures for Rolls-Royce PDF

A white background with black text Description automatically generated A tall organisational structure is one with many layers and a narrow span of control for each manager. A flat organisational structure is one with few layers and a wider span of control for each manager As Rolls-Royce is over 1...

A white background with black text Description automatically generated A tall organisational structure is one with many layers and a narrow span of control for each manager. A flat organisational structure is one with few layers and a wider span of control for each manager As Rolls-Royce is over 100 years old the tall structure could have evolved as different functions/departments, such as parts and servicing, were added to the business The senior managers who were removed may have been experienced members of staff therefore the business could have lost valuable expertise, which could have helped Rolls-Royce improve its profit performance in the future. Tall structures allow employees to be carefully supervised,which could be beneficial to a business, such as Rolls-Royce,where staff are involved in technical engineering tasks to minimise waste. Lines of responsibility and accountability are clear, which can help Warren East identify those responsible for poor quality products Horizontal communication is often better in a tall structure because of narrower spans of control - this could be beneficial in an organisation with different departments and functions with 54,000 employees For employees of Rolls-Royce, there may be clear and more opportunities for promotion and this can be motivating for workers who may begin careers in simple manufacturing tasks. This may, in turn, increase productivity and loyalty. However lots of layers and a long chain of command in a tall strcuture can mean the business is very inflexible, his can act as a disadvantage when trying to adapt to unexpected market trends. In a tall structure communications within the organization also tend to be slow, this can have a negative effect on productivity and customer service. Tall structures also tend to be expensive as there are more managers and supervisors, such a structure could lead to higher average costs and diseconomies of scale which negatively affect competitiveness. In a flat organisational structure Vertical communication can be more effective as there is a shorter chain of command. This can make organisations more responsive, something that Rolls-Royce needs to be in a competitive market. Decision-making can be faster in a flat structure as fewer levels of management are involved in each decision (\"a week would be saved for every month it took to make a decision\"). Flattening an organisation is likely to reduce the total wage bill in Rolls-Royce, which may help improve profitability given its poor profit performance in 2015 In a flat structure more decision-making is delegated by managers due to wider spans of control. This can allow Rolls-Royce engineers to be more responsive to the needs of customers in a market where competitors are taking market share However, in a flat structure staff can become overstretched or overworked. There is less supervision, this can cause stress and be demotivating for staff, all of which affects productivity. Rolls Royce could have problems with staff morale if this were to happen Flat structures can create a power struggle if the manager is rarely around as subordinates jostle for roles and responsibilities. Again this can have a the effect of staff not focusing on being productive and rolls Royce could experience some internal economies of scale. Another disadvantage is that a wide span of control means that managers have too many staff to manage and may lose touch with them, again this can lead to low staff morale and poor prodcuctivity which means higher average costs for rolls Royce. East\'s decision should depend on the reasons for restructuring; he has already removed one layer of management, but this is a small action in an organisation of Rolls-Royce\'s size If cost-cutting and improving profitability are the short-term aim of restructuring, then moving to a flatter structure should be the option that is followed. If Warren East is more concerned about keeping control of the organisation through closer supervision and ensuring Rolls-Royce staff are accountable, then a taller structure with narrow spans of control would be the better option.