A-Level Edexcel Business Managing Change: 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. Given that Rolls-Royce is over 100 years old, a 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 the narrower span of control – this should be beneficial 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 spent 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 more decision-making is delegated by managers to lower paid workforce, 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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