09:Do you think that having many levels of hierarchy is the best type of organisational structure for a large business?

[Dania]

FGH is a private limited company. FGH has a tall hierarchical organisational structure. It is a book retailer which plans to take over one of its competitors for $800m. If the takeover happens, FGH would have 6 500 bookshops across 20 countries. FGH’s Managing Director said:We expect to reduce total costs by $300m each year after the takeover. We will stop all off-the-job training of employees.

09:Do you think that having many levels of hierarchy is the best type of organisational structure for a large business? Justify your answer.[6]

Possible KN Points:
>Having levels of hierarchy (tall hierarchy) means a long chain of command.
>Senior managers are more remote from employees.
>Managers have fewer employees to supervise.
> Can provide more opportunities for promotion .
>Having a wider structure would lead to a short chain of command/each manager having to be responsible for more people.