(A)

Consider the case of the Organizational structure proposed by the Chef Financial Officer F:

(1) Advantages and disadvantages of structure proposed by F:

Advantages:

• In the instant case, the way in which F presented the organization chart tries to divide the organization
into two halves for better understanding and transparency.

• Following further sub-division i.e. bottom up approach where person/employee at the lower level will
not have to report to the top level for small issues it can be resolved at lower level itself.

• The other advantage of presenting the structure Is it helped the top-tier i.e. the treasurer/controller
from daily Issues and focus more on strategic issues.

Disadvantages:

• However, the structure is also not free from limitation i.e. the way F tried to divide the organization
would require more employees and manpower.

• Also, it increases the cost and expenses of the company and at the same time reporting tree becomes
much more complex.

(2) Impact of the resulting Extent of Power:

• A manager’s extent of power refers to how many subordinates are there and are directly or indirectly
reporting to them.

• Organization with a thin extent of control will have less delegates reporting to him directly. Generally
such organization have long and small/thin structure with many layers i.e. too many people under one
roof.

• Organization with wide extent of power which means more people reporting to one
manger/hierarchy.

• In the instant case F presented the organization structure with narrow structure. • Managers with thin
extent of power are closely involved with all the details of the operations in which all the employees are
involved i.e. they are monitoring them in day to day activities. • These managers provide/delegate more
work to their subordinates and generally require detailed reports.

Possible Effect on Employee behavior:

• Decision making ability get distributed and employee at bottom level feels motivated by contributing
to the decision making.

• At the same time, they have to be very efficient since detailed report is required by the top-level
authority. • Employee feels motivated as they are recognized or appreciated very early in their career
since their work gets noticed very fast but on the contrary it may at times create problem.
(B) For organizational structure B describe the

Consider the case of the Flat Organizational structure proposed S-President of R:

(1) Advantages and disadvantages of structure:

Advantages:

• In the instant case, S preferred flat organizational structure which has fewer employees as compared
to structure presented by F.

• Also, S followed a top down approach i.e. less hierarchy and less reporting requirement by dividing the
structure into two broad heads i.e. Treasurer and Controller.

-He assigns the responsibility to them for any reporting by employees at lower thus reducing the burden
of chain reporting and at the same time fastened the decision-making process.

Disadvantages:

However, the basic drawback is delay and the top-level authority is burdened with too much
responsibility because they have to handle too many things and it also affects the quality of the work.

(2) Impact of the resulting Span of Control:

• An important consideration in setting the extent of authorization/power is correlated with the type of
work.

• The more day to day activities will be controlled by subordinate manager since it lack strategic decision
making. Therefore, day to day activities are correlated with thin extent of control.

• Unstructured or technical work requires top level participation on important problems.

• More communication between the manager/subordinate managers decreases the manager's extent of
control.

• Since the organization framework is broad extent of control would be less detailed and more
summarized.

(3) Effect on Employee behavior:

• Research have shown that organization with wider extent of control are more preferred because they
allow employees to be a part in the decision-making process.

• Broader Structure may motivate the employee and also make them more ethical. In the organization
chart shown by S employee can work more freely with less reporting requirement.

• Detailed work required is less so they work casually which may be advantageous at time since their
concern would be to only deliver the output.

• Fear of reporting immediately or they have to work each and everything in detail which may not be
required at times.
(c)

The extent of control that would be appropriate or should be appropriate for A, Inc. should be a balance
of both the organizational structure presented by S and F. The factors they should consider while
designing the organization is as follows: • They should clearly set forth the objective of the organization
and what is required in due course of time based on which they should prepare the organization chart.

• Prima facie requirement is detailed report is required for the company but at the same time it should
be cost effective then one should go for F organizational structure

• Keeping in mind the limit of employee which it should not exceed and on the contrary if the
requirement is summarized report and major decision is taken by the treasurer and controller then one
should go with S structure.

• So, factors which one should consider will depend upon the goal of the company, different reporting
requirements required and manpower strength.