A-Level Edexcel Business Influences on Business Decisions: Evaluate these two options and r

Question

Evaluate these two options and recommend which is most suitable for a business, such as Rolls-Royce.

Option 1: Tall structure
- A tall organisational structure is one with many layers and a narrow 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 Rolls-Royce identify those responsible for poor quality products.
- Horizontal communication is often better in a tall structure because of the narrower spans of control - this can lead to greater efficiency in an organisation with different departments and functions with 54,000 employees.

Option 2: Flatter structure
- A flat organisational structure is one with few layers and a wider span of control for each manager.
- Vertical communication can be more effective in a flatter structure 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 required 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.
- A flat structure also means more decision-making is delegated by managers, allowing Rolls-Royce engineers to be more responsive to the needs of customers in a market where competitors are taking market share.

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

Worked Solution & Example Answer:Evaluate these 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

Option 2: Flatter Structure

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