2.5.1a Hierarchical and flat, centralised and decentralised structures Quiz: Pearson Edexcel Business, Unit 10

The 20 questions

1. In a hierarchical structure, what is the main feature?

   • Every employee reports directly to the owner of the business in a single line
   • Decisions are made by a vote of all staff members at every stage of the process
   • There are no managers, so each team leads itself entirely without any supervision
   • Clear levels of authority, with each level reporting to the one above

2. What is a flat organisational structure?

   • A structure in which every decision must be approved by the government
   • A structure with few levels of management between the top and the front line
   • A structure that has no employees, only freelance contractors
   • A structure with many layers of managers between the top and the front line

3. A business has 800 employees and 6 layers of management. Which structure does it most likely have?

   • Hierarchical
   • Freelance
   • Flat
   • Centralised with no managers

4. Which is an advantage of a flat structure?

   • Greater control over each employee by a large number of managers working closely together
   • Clear career ladders with many promotion steps available to every employee in the business
   • Less need for staff to communicate with each other across the different parts of the business
   • Faster communication and decision making because there are fewer levels to pass through

5. What is a centralised structure?

   • Decisions are made by customers voting on each product in the shop
   • Decisions are made by a small group at the top of the business
   • Decisions are made by each branch or department without reference to head office
   • Decisions are made by staff in a single town that is far from head office

6. What is a decentralised structure?

   • The business has no managers, so all decisions are made by the customers who buy goods
   • All decisions are made by the owner and recorded in a central office in the head office
   • Decisions are delegated to managers and teams in different parts of the business
   • Decisions are made only by the national government on behalf of the business each year

7. A large chain wants local shops to choose their own local promotions. Which structure fits best?

   • Hierarchical with no delegation
   • Centralised
   • Decentralised
   • Freelance with no managers

8. Which is a disadvantage of a centralised structure?

   • Slow decisions and less responsiveness to local conditions
   • Too many layers of management that slow down all communication
   • Too much delegation, so the owner loses control of the business entirely
   • Too much local autonomy, so branches make inconsistent choices

9. Which is a disadvantage of a decentralised structure?

   • Branches may make decisions that are inconsistent with the business's overall strategy
   • Managers are not allowed to set targets for their own teams to achieve in each period
   • Decisions are always made too slowly because they must be checked by the owner each time
   • Branches always make identical decisions, so local teams cannot respond to their own customers

10. A small business with ten staff wants quick decisions. Which structure is most suitable?

    • A structure in which every decision goes to a regional office for approval
    • A tall hierarchy with many layers of management
    • A flat structure with few layers and direct communication
    • A structure with separate, unconnected departments that never meet

11. Which is the best description of a tall organisational structure?

    • It has very few layers of management, with the owner close to all of the staff
    • It has many layers of management between the top and the bottom of the business
    • It has no managers and relies entirely on self-governing teams to make decisions
    • It has offices that are physically very tall and sit in the centre of the city

12. A business with 120 staff has 4 managers at the top. Each manager has 30 direct reports. Is this structure flat or tall?

    • Tall, because there are many layers of management
    • Flat, because there are few layers of management
    • Tall, because the business has more than one manager at the top
    • Flat, because each manager has no reports at all

13. Why might a decentralised structure motivate local managers?

    • It places all decisions with the head office, so local managers have no work
    • It gives them responsibility and authority to make decisions in their own area
    • It removes all accountability, so managers are never asked to explain results
    • It means managers have no targets and receive no feedback from head office

14. Which is the main benefit of a centralised structure for a large business that sells the same product in every country?

    • Consistent standards and decisions across all markets
    • Greater variety because each local manager sets the product range
    • Quicker local decisions because each market makes its own choices
    • Fewer rules because local staff are free to ignore any policy

15. A business has a flat structure but its managers have too many staff to supervise well. What is the most likely problem?

    • A narrow span of control that gives managers too little work to do
    • A decentralised structure that removes all supervision of staff
    • A tall structure that adds too many layers to every decision
    • A wide span of control that reduces the quality of supervision

16. Which structure would a business most likely use if it wanted all staff to follow one set of procedures?

    • Freelance
    • Centralised
    • Decentralised
    • Ad hoc

17. A business moves from a tall structure to a flat one. Which change is most likely?

    • More management layers, so every decision takes longer to reach the top of the business
    • Fewer management layers and quicker communication between the top and the front line
    • A rise in the number of managers who report to each senior manager in the business
    • A move from decentralised to centralised decision making at all times in every part

18. Which statement about hierarchies is true?

    • They never have clear lines of responsibility between the staff members who work together
    • They always make decisions faster than any flat structure can manage in practice
    • They give clear lines of responsibility, though communication can be slower
    • They are only used by businesses with fewer than fifty employees in total at all

19. A manager asks: Would a larger business benefit from a decentralised structure? Which is the strongest answer?

    • Yes, because local decisions can respond quickly to different markets, though control must be maintained
    • No, because a single central team can respond to every market more quickly than local managers
    • Yes, because local managers can take over most strategic decisions without reporting back to head office
    • No, because decentralised structures make it harder to motivate staff and keep them loyal to the firm

20. Explain why a business might choose a structure that mixes centralised and decentralised decisions.

    • It means that all decisions are made by the owner and none by any other person at all
    • It removes the need for managers, because every decision is shared by all of the staff
    • It guarantees that every employee has the same authority in every decision the firm takes
    • It can keep strategy consistent while letting local teams respond to their own customers

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