Business Structure And Management Style Commerce Essay

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"An example of a decentralised structure is Tesco the supermarket chain. Each store of Tesco has a store manager who can make certain decisions concerning their store. The store manager is responsible to a regional manager."

Advantages of Centralised Structure For Organisations

Advantages of Decentralised Structure For Organisations

Senior managers enjoy greater control over the organisation.

Senior managers have time to concentrate on the most important decisions (as the other decisions can be undertaken by other people down the organisation structure.

The use of standardised procedures can results in cost savings.

Decision making is a form of empowerment. Empowerment can increase motivation and therefore mean that staff output increases.

Decisions can be made to benefit the organisations as a whole. Whereas a decision made by a department manager may benefit their department, but disadvantage other departments.

People lower down the chain have a greater understanding of the environment they work in and the people (customers and colleagues) that they interact with.  This knowledge skills and experience may enable them to make more effective decisions than senior managers.

The organisation can benefit from the decision making of experienced senior managers.

Empowerment will enable departments and their employees to respond faster to changes and new challenges. Whereas it may take senior managers longer to appreciate that business needs have changed.

In uncertain times the organisation will need strong leadership and pull in the same direction. It is believed that strong leadership is often best given from above.

Empowerment makes it easier for people to accept and make a success of more responsibility.

Tall and Flat structures

Flat structure

Advantages of flat structures

Disadvantages of flat structures

More/Greater communication between management and workers.

Workers may have more than one manager/boss.

Better team sprit.

May limit/hinder the growth of the organisation.

Less bureaucracy and easier decision making.

Structure limited to small organisations such as partnerships, co-operatives and some private limited companies.

Fewer levels of management which includes benefits such as lower costs as managers are generally paid more than worker.

Function of each department/person could be blurred and merge into the job roles of others.

Tall Structure

Advantages of tall structures

Disadvantages of tall structures

There is a narrow span of control i.e. each manager has a small number of employees under their control. This means that employees can be closely supervised.

The freedom and responsibility of employees (subordinates) is restricted.

There is a clear management structure.

Decision making could be slowed down as approval may be needed by each of the layers of authority.

The function of each layer will be clear and distinct. There will be clear lines of responsibility and control.

Communication has to take place through many layers of management.

Clear progression and promotion ladder.

High management costs because managers are generally paid more than subordinates. Each layer will tend to pay its managers more money than the layer below it.

Democratic Management Style

A democratic manager delegates authority to his/her staff, giving them responsibility to complete the task given to them (also known as empowerment). Staff will complete the tasks using their own work methods. However, the task must be completed on time. Employees are involved in decision making giving them a sense of belonging and motivating individuals. Because staffs feel a sense of belonging and are motivated the quality of decision making and work also improves. Although popular in business today, a democratic management style can slow decision making down because staffs need to be consulted. Also some employees may take advantage of the fact that their manager is democratic by not working to their full potential and allowing other group members to 'carry' them.

Autocratic Management Style

In contrast to the above an autocratic manager dictates orders to their staff and makes decisions without any consultation. The leader likes to control the situation they are in. Decision is quick because staffs are not consulted and work is usually completed on time. However this type of management style can decrease motivation and increase staff turnover because staff are not consulted and do not feel valued.

Consultative Management style

A consultative management style can be viewed as a combination of the above two. The manager will ask views and opinions from their staff, allowing them to feel involved but will ultimately make the final decision.

Laissez Faire Management style

A laisses faire manager sets the tasks and gives staff complete freedom to complete the task as they see fit. There is minimal involvement from the manager. The manager however does not sit idle and watch them work! He or she is there to coach or answer questions, supply information if required. There are benefits; staffs again are developed to take responsibility which may lead to improved motivation. However with little direct guidance from the manager staff may begin to feel lost and not reach the goals originally set within the time frame.



It will matter a lot on how long it will takes to make a decision in a leadership style.

Certain task will also result to emergencies because you will need immediate response from the authority.

The tradition of the organisation

The business can also put together its own culture to sort out different members of their staff which are working in different levels.

It occurs mostly when the leadership styles are developed within the organisation.

Type of labour force

The democratic leadership style will be appropriate because they will get more options.

Highly skilled workforces will have to be more dynamic when the are wanted for their opinions.

Democratic leadership styles may be more appropriate in this case.

Group personality

Employees will be redirected either because of their previous experience or the lack of interest.


Time is also another issue because the leadership styles with in the project will have to be done within the autocratic style leadership.


The type of business I would work in would certainly be a matrix structure organization. I would also work under a democratic manager because for autocratic the manager will be setting me objectives where as in democratic I get support by the manager for my ideas. Also I will get encouraged in making good decisions and also will be motivated to create new ideas.