Org chart: hierarchy, span and chain
An organisational chart shows how a business is structured and who reports to whom. Hierarchy is the levels of authority. Span of control is how many subordinates report directly to one manager. Chain of command is the line of authority down through the levels. Delayering removes a level to flatten the structure. Exam skill: link a feature to a consequence — a short chain means messages pass through fewer people, giving quicker communication and fewer mistakes.
Centralisation vs decentralisation
A business must decide where decisions are made. Centralisation keeps the important decisions at the top: tight control and consistency, but slow and it can ignore local conditions. Decentralisation delegates decisions to local managers or branches: it meets local needs and motivates managers, but risks inconsistency and weaker control. Delegation is passing one task down; decentralisation applies it to whole areas or branches, which suits a large multi-site firm.
Roles by level and functional areas
Roles by level: directors set the strategy and answer to shareholders; managers plan a department and its staff; supervisors oversee a small team; operatives carry out the tasks. Functional areas: HR (staffing and training), finance (money, budgets, accounts), marketing (research and the marketing mix), operations (making the product). The functions must work together, and in a small firm one person may cover several.
Drawn from real examiner reports.
No context on State/Outline items
The biggest lost mark on 2.5 is a correct generic point with no context. On a "State/Outline one reason to delegate" candidates give a valid reason (it frees the manager) but do not apply it to the named firm, losing the application mark. Naming the business is not context — add a specific detail, such as what the manager can then focus on.
Nov 2024 Paper 2 Q1(d): a delegation State item was valid but not in context and 80% failed to score.
Naming a feature but not its effect
Candidates often name a structural feature but stop before the consequence. A short chain means fewer levels, so messages pass through fewer people, giving quicker communication and fewer mistakes. A wide span cuts management cost but each manager supervises more staff, thinning supervision. Always develop the chain: feature, what it changes, effect.
June 2024 Paper 2 Q2(d): the short chain of command scored well only when the chain was developed to fewer mistakes; June 2024 Paper 1 Q2(d): decentralisation advantages were missed when the benefit was left unexplained.
Delegation vs decentralisation
Delegation and decentralisation are different. Delegation is passing authority for a single task down to a subordinate. Decentralisation hands whole areas or branches to local managers, so decision-making for entire functions or locations passes down. It is the broader, more permanent idea, so treating the two as the same makes structure answers imprecise.
Delayering vs downsizing
Delayering and downsizing are not the same. Delayering removes a management LEVEL to flatten the structure, which shortens the chain of command and widens spans of control. Downsizing cuts the total number of staff. Delayering is about levels of management, not simply headcount — a firm can delayer without a large fall in total employees.
Director vs manager confusion
A director and a manager are not the same level of authority. A director sets the overall strategy and objectives and is appointed by and answerable to the shareholders. A manager plans, organises and controls one department and its staff within that strategy. Treating director and manager as interchangeable loses the role-definition mark.
Naming a task in the wrong function
A "role in the marketing function" must be a genuine marketing task — market research, promotion, pricing or the marketing mix — AND applied to the business. Weaker answers name a task from a different function (finance, HR or operations) or give no context. Naming a role outside the function asked about scores nothing, even if it is a real job in the firm.
Nov 2024 Paper 2 Q2(a): marketing-function roles were poorly answered because candidates gave no context or named a role outside the marketing function.
Flat is not always better; span ≠ chain
Two linked traps. Flat is not always better: flat structures speed communication but each manager supervises more staff; tall structures supervise closely but are slower and costlier. Span vs chain: span of control is how many report directly to one manager (across); chain of command is how many levels run top to bottom (down). Delayering does both at once, so the two blur.
Match the command word
Match the command word. Define/State gives the term (in context for State). Outline is one developed point in context. Analyse builds a chain of application and reasoning, no judgement. Justify and Evaluate need a supported judgement. Read what the verb demands first.
Justify/Evaluate needs a supported choice
On the 9-mark "Justify" and 12-mark "Evaluate", the AO4 marks come from choosing one option and saying why it suits this business, not listing pros and cons with no decision. Judgement hooks: business size, number of locations, and how much local variation there is.
No calculation in topic 2.5
Organisation structure is a qualitative topic — there is no formula to recall here. Break-even and ARR belong to Section 3, and the accounting ratios are provided in the exam. Spend your time on the developed chain and the supported judgement, not on numbers.
An organisational chart is a diagram of how a business is structured and who reports to whom. Learn these four terms:
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