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ACCA Applied Knowledge · Business and Technology · Business organisational structure

A manager has 12 subordinates, and the organisation is considering restructuring to reduce this to 6 by adding a layer of supervisors. Which combination of effects is most likely to result from reducing the span of control in this way?

Reducing the span of control from 12 to 6 creates a taller hierarchy with more management layers. This allows closer supervision, but communication becomes slower and management costs rise because more supervisors are needed. A flatter structure would result only from widening spans.

  1. AA flatter hierarchy, faster communication and lower management costs
  2. BA taller hierarchy, closer supervision but slower communication and higher management costsCorrect
  3. CA flatter hierarchy, closer supervision and greater delegation
  4. DA taller hierarchy, faster communication and reduced management costs

Explanation

Narrower spans with the same number of staff need more managers and more levels, so the hierarchy becomes taller. This permits closer supervision but lengthens communication chains and raises management cost. A flatter hierarchy comes from widening spans, which is the opposite change.

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