9609 · 7.1.1
The relationship between business objectives and organisational structure flashcards
Revision flashcards for Cambridge 9609 The relationship between business objectives and organisational structure (syllabus 7.1.1). Flip, recall, then mark a real past-paper question.
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Structure follows strategy?
Chandler — org design should support strategic goals (6.2).
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Cost minimisation objective?
May need central control, standardisation, functional structure.
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Innovation objective?
Flat/matrix structure, delegated authority, R&D autonomy.
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Misalignment example?
Centralised HQ slowing local market response.
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Growth trigger?
Informal structure becomes inadequate — need formal layers (7.1.2).
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International expansion?
May need geographic divisions or matrix.
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Exam approach?
State objective → describe current structure → judge fit → recommend change.
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Link to stakeholders?
Structure affects empowerment of managers and employee morale.
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What is the principle of 'structure follows strategy'?
The concept that a business should first define its long-term objectives and strategy, and then design its organisational structure to best support the execution of that strategy. The structure is a tool to achieve strategic goals.
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How does a cost leadership objective typically influence organisational structure?
It usually leads to a centralised, hierarchical (tall) functional structure. This promotes standardisation, tight cost control, clear lines of authority, and maximises economies of scale.
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What type of structure best supports an objective of rapid innovation?
A flexible, decentralised structure such as a matrix or project-based organisation. This encourages cross-functional collaboration, empowers employees, and speeds up communication and idea generation.
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Define 'delayering' in the context of organisational structure.
The process of removing one or more levels of hierarchy from an organisational structure. This strategic change creates a flatter organisation with wider spans of control and a shorter chain of command.
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State two key consequences of a mismatch between a business's structure and its objectives.
1. Slower decision-making and reduced responsiveness to market changes. 2. Inefficient use of resources due to poor coordination or duplication of roles.