Medium2 marksMultiple Choice

Organisational structure, culture, governance and sustainabilitySection ASyllabus BOrganizational Structure

ACCA · Question 10 · Organisational structure, culture, governance and sustainability

QuantumCode is a software startup with 50 employees. The CEO insists on a 'flat' organizational structure to promote rapid innovation. Consequently, there are no middle managers; all 49 employees report directly to the CEO. Which of the following is the most likely negative consequence of this specific structural choice?

Answer options:

The scalar chain will be too long, causing communication to be distorted.

The CEO will suffer from an excessively wide span of control, leading to bottlenecks in decision-making.

Employees will feel micromanaged due to the tall hierarchy.

The organization will become overly bureaucratic and slow to adapt to market changes.

How to approach this question

Analyze the numbers: 1 manager for 49 employees. This relates to the 'span of control'. A wide span of control can overwhelm a manager.

Full Answer

B.The CEO will suffer from an excessively wide span of control, leading to bottlenecks in decision-making.✓ Correct

Span of control refers to the number of subordinates reporting directly to a manager. A flat structure inherently creates a wide span of control. While it empowers employees, an excessively wide span (like 1:49) usually leads to management overload and decision bottlenecks.

Common mistakes

Confusing 'scalar chain' (vertical layers) with 'span of control' (horizontal spread).

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