Page 95 - Cambridge IGCSE Business Studies

7: Organisation and management

■ The size of the business – larger businesses are often able to afford to employ

TOP TIP more managers than smaller businesses. The span of control of individual

Note that many of the managers in a large business is often narrower than that for managers in small
advantages of one size of span businesses.
of control are the disadvantages
■ Levels of hierarchy – managers in tall organisation structures will usually have
of the other size of span of
narrower spans of control than managers in flat organisation structures.
control. Learn the advantages
and disadvantages of narrow ■ Management style – some businesses use a management style that has greater
span of control and the opposite control over the workforce than others. In this type of business, managers have a
will be the disadvantages and
narrow span of control.
advantages of wide span of
control. There are a number of advantages and disadvantages of wide and narrow spans of

control. These are shown in Table 7.1.

Wide span of control Narrow span of control

Advantages Disadvantages Advantages Disadvantages
Less expensive as fewer Fewer managers/supervisors Effective communication is Communication and

managers/supervisors are reduces promotion easier. decision-making is oft en
needed. opportunities. slower.
Less supervision improves Less control over Better control over workers More expensive because more
worker motivation. subordinates work. and their work. managers are needed.

Faster communication and Effective communication may More managers/supervisors More supervision may reduce

decision-making. be diff icult. increases promotion worker motivation.
opportunities. 93
Table 7.1 Advantages and disadvantages of narrow and wide spans of control

Tall or flat?

Organisational structures may be tall or flat, depending on the number of levels in
the hierarchy.
Tall organisations have many levels of hierarchy. Each level in the hierarchy,
except for the bottom level, is a layer of management. Because a tall organisational
structure has several layers of management, and therefore more managers, the
span of control for each manager will be narrow. The chain of command is long.

Communication and decision-making are often slower because they must pass
through several layers.
An example of a tall organisational structure is shown in Figure 7.4.

1

2 2

3 3 3 3

4 4 4 4

5 5 5 5
Figure 7.4 A tall hierarchical structure