Types of organisation

Organisational structures can be tall or flat depending upon the business hierarchyThe staff structures of a tall organisation and a flat organisation

Tall organisations have many levels of hierarchy. The span of control is narrow and there are opportunities for promotion. Lines of communication are long, making the firm unresponsive to change.

Flat organisations have few levels of hierarchy. Lines of communication are short, making the firm responsive to change. A wide span of control means that tasks must be delegated and managers can feel overstretched.

In centralised organisations, the majority of decisions are taken by senior managers and then passed down the organisational hierarchy.

Decentralised organisations delegate authority down the chain of command, thus reducing the speed of decision making.

One method of reducing costs is to remove a layer of management in a hierarchy while expecting staff to produce the same level of output. This is called delayering.

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