Evaluate the two options and recommend which is most suitable for a business, such as Rolls-Royce - Edexcel - A-Level Business - Question 1 - 2017 - Paper 1

Option 1: Tall Structure

1. Structure Overview: A tall structure has numerous layers of management, which may lead to clearer lines of authority and accountability. This is particularly important for Rolls-Royce given its complexity and large workforce of over 54,000.

2. Pros:

   • Supervision: Taller structures allow for closer supervision, which is vital in a technical engineering environment to minimize risk and waste.
   • Career Development: More layers can provide employees with more opportunities for promotion, potentially increasing motivation and productivity.

3. Cons:

   • Slower Decision-Making: Taller structures often lead to slower decision-making processes, as information must pass through more levels of management.
   • Loss of Expertise: The recent reorganization might have resulted in the loss of experienced management, jeopardizing operational efficiency.

Option 2: Flatter Structure

1. Structure Overview: A flatter structure has fewer layers of management, enabling faster communication and more responsive decision-making.

2. Pros:

   • Efficiency: A flat structure facilitates quicker decision-making processes, allowing Rolls-Royce to adapt to market changes more rapidly.
   • Cost-Effectiveness: Reducing management levels can cut wage costs, potentially improving profitability.

3. Cons:

   • Broad Management Role: Managers in flat structures may have a wider span of control, which could lead to overburdening and decreased effectiveness.
   • Less Supervision: With fewer levels, there is a risk of inadequate supervision, which might impact overall product quality.

Recommendation

Considering the current challenges Rolls-Royce faces, moving towards a flatter organizational structure seems more beneficial. This would enhance responsiveness and reduce costs. However, care must be taken to maintain adequate support systems for technical supervision to ensure product quality remains high.