2.5.1 Organisational structures (2)

Which of the following is the term used to describe a business where key decisions are made at head office?

• Hierarchical organisational structure

• Flat organisational structure

• Centralised business

• Decentralised business

Which of the following is a feature of a flat organisational structure?

• Rigid rules

• A more flexible approach to decision making

• Many levels in the hierarchy

• More promotional opportunities for employees

Which of the following organisations is most likely to have a hierarchical organisational structure?

• An accountancy firm with two partners and ten employees

• A mobile hairdressing business with two employees

• A sole trader plumber who works alone

• A chocolate manufacturer with 250 employees

In which of the following situations would decentralisation be the most appropriate?

• When directors wish to keep a tight control on all areas of decision-making within the organisation

• When standardisation of products and outlets is required

• When the business wants to give local managers more authority to make key decisions

• When a strong corporate image is important to business success

Which of the following is an advantage of a centralised business?

• Decision making is consistent across the organisation

• Increased motivation amongst junior managers

• Reduces the pressure on senior managers

• Increased staff involvement in the decision making process

Which of the following organisations is most likely to be decentralised?

• A hotel chain that aims to solve customer complaints in any of its hotels immediately

• A national fast food chain that prides itself on consistent levels of customer service across all of its outlets

• A national clothes retailer that wants to offer customers the same product range in all branches and benefit from bulk buying stock

• A chain of coffee shops that aims to offer the same experience to customers regardless of the outlet visited

Which of the following is a benefit to a business of having a hierarchical organisational structure?

• There will be a flexible approach to decision making

• More responsibility is given to employees lower down the hierarchy

• Communication is likely to be faster

• More promotion opportunities available for staff

Which of the following best describes the term decentralisation?

• The business is organised into different functional areas

• Key decisions are made by a small number of senior staff

• The business is geographically widespread

• Junior managers are given authority to make important decisions

Which of the following situations would be most suited to a hierarchical organisational structure?

• An established sole trader organisation with three employees

• Where the business needs to make quick decisions involving all staff

• Where managers wish to keep a tight control over their staff

• A new business start-up with five staff members

Which of the following is a key feature of centralisation?

• Major decisions are made by a small number of senior staff

• Major decisions are made by junior staff

• Delegation is actively used in the organisation

• Branch managers have full decision making power