ExpertBusiness Organisational Structure and Design
Learning outcomes
- Evaluate functional, divisional, and matrix structures.
- Understand span of control and centralisation dynamics.
Types of Organisational Structure
- Functional: Grouped by skill (e.g., all accountants in Finance, all marketers in Marketing). Good for small/medium firms. Can create 'silos'.
- Divisional: Grouped by product or geography (e.g., North America Division, European Division). Good for large multinationals.
- Matrix: A hybrid. Employees have dual reporting lines (e.g., reporting to the Head of IT and the Manager of Project Alpha).
Which organisational structure is most likely to suffer from the 'two boss' problem, leading to conflicting priorities for an employee?
Span of Control vs Chain of Command
Span of control is the number of subordinates reporting directly to one manager. Chain of command is the vertical line of authority from top to bottom. Do not mix them up!
Centralisation vs Decentralisation
- Centralised: Decision-making is kept at the top (Head Office). Ensures consistency but is slow.
- Decentralised: Decision-making is pushed down to local managers. Faster and more responsive to local markets, but risks inconsistency.
A global fast-food chain allows local country managers to design their own menus and set their own prices. This is an example of:
Exam Focus
If a scenario describes a fast-changing, highly technical environment, the Matrix structure is usually the best fit because it allows flexible allocation of specialists to different projects.
What is a primary advantage of a functional structure?
A manager has 25 direct reports. This manager has a:
Which of the following factors would encourage a company to become MORE centralised?
Ready to put this into practice?
Ready to test yourself?
ACCA BT — Business & Technology Practice Exam 3
Premium mock exam replication for ACCA Business and Technology (BT). This exam mirrors live computer-based testing parameters, featuring 46 Objective Test Questions (Section A) and 6 Multi-Task Questions (Section B). It covers the complete syllabus: Business Organization, Structure & Governance, Technology & Regulation, Leadership, Personal Effectiveness, and Professional Ethics.