Syllabus: Pearson Edexcel AS Business
Module: Managing People
Lesson: 1.4.3 Organisational Design

Introduction

This Pearson Edexcel AS Business lesson on Organisational Design sits within Theme 1: Marketing and People, specifically under the “Managing People” module. It explores how organisational structures influence communication, decision-making, employee motivation, and business performance. Understanding the structure of a business is essential for interpreting how leadership flows, how responsibilities are delegated, and how efficiently a business operates – key elements for AO1 and AO2 exam success.

This topic builds context for later studies on motivation, leadership styles, and human resource strategy, linking people management directly to operational effectiveness.

Key Concepts

The Pearson Edexcel AS Business syllabus identifies several key areas for 1.4.3 Organisational Design:

• Hierarchical Structures: Tall vs flat structures, the impact on communication flow, span of control, and authority levels.
• Chain of Command: The line of authority within an organisation and how instructions and accountability move through layers.
• Span of Control: Number of subordinates directly managed by one person. Narrow spans = closer supervision; wide spans = more autonomy.
• Centralised vs Decentralised Decision-Making:
  • Centralised: Decisions made by top management, consistent but can feel rigid.
  • Decentralised: Decisions pushed down to lower levels, encouraging flexibility and employee ownership.
• Matrix Structures: Employees report to multiple managers across projects and departments, useful for cross-functional collaboration but can create conflict.
• Impacts on Motivation and Efficiency: Structure affects employee morale, communication clarity, innovation potential, and operational agility.
• Adapting Structures for Growth or Change: As businesses expand, they may need to evolve from flat to tall structures or decentralise to remain responsive.

Real-World Relevance

Organisational design isn’t theoretical – it defines how businesses run day to day.

• Spotify famously uses a matrix-like “Squad” model – autonomous teams that blend cross-functional roles. This supports rapid innovation but requires robust communication to avoid duplication or confusion.
• Tesco, by contrast, shifted from a highly centralised model to a more decentralised one at regional and store level after realising that decision-making was too slow and disconnected from local needs.
• In contrast, Twitter’s mass layoffs in 2022 showed how flattening a structure overnight can lead to chaos, with unclear responsibilities and gaps in critical functions.

These cases show how structure supports – or undermines – business goals, especially during periods of growth or crisis.

How It’s Assessed

This topic frequently appears in Paper 1, which covers Marketing and People.

Common Command Words:

• Explain: “Explain one disadvantage of a tall organisational structure.”
• Analyse: “Analyse the impact of a decentralised structure on a fast-growing retail business.”
• Evaluate: “Assess whether a matrix structure would suit a start-up tech company.”

Typical Question Formats:

• 10- or 12-mark questions often integrate context, e.g., a case study about a company changing structure post-expansion.
• Diagrams might be used or expected in responses – encourage students to annotate hierarchies or chains of command to gain analysis marks.

This lesson is rich for assessment because it links theory to HR, operations, leadership, and even marketing responsiveness.

Enterprise Skills Integration

Organisational Design is closely tied to several key enterprise skills:

• Decision-Making: Choosing between centralised and decentralised models affects all functions – from marketing campaigns to product launches.
• Communication: Understanding chain of command and span of control is vital to diagnosing why communication bottlenecks occur in a business.
• Adaptability: Fast-changing markets require businesses to restructure regularly. Students can use tools like MarketScope AI to model how changes in organisational structure affect communication flow or project delivery.
• Problem-Solving: When a business is struggling with efficiency or morale, structure might be the root cause. This topic gives students the lens to diagnose those problems.

Careers Links

This topic links directly to careers in:

• Human Resource Management: Designing job roles, restructuring departments, planning for growth.
• Operations Management: Ensuring efficient communication and workflow across business units.
• Project Management: Navigating matrix structures and cross-functional teams.
• Entrepreneurship: Scaling a business means designing a structure that supports innovation without losing control.

It supports Gatsby Benchmark 4 by helping students understand real organisational challenges they’ll face in modern workplaces.

Teaching Notes

What teachers say (and need) from our empathy research is clear: lessons must engage students, align to outcomes, and not add to workload. Here’s how to deliver that:

Quick Win Activity

Ask students to:

• Draw a tall and a flat organisational chart for the same fictional company (e.g. a café chain).
• Identify pros/cons of each in relation to communication, motivation, and control.

Stretch Task

Case comparison: Provide two brief case studies (e.g. Tesco vs Spotify) and have students recommend which structure better suits a third company scenario. Ask for justification using command words.

Common Misconceptions

• Confusing span of control with chain of command.
• Thinking decentralisation means “no control” or centralisation means “micromanagement”.
• Believing flatter structures are always more efficient – they’re not if the business is large or regulated.

Tip from the Field

Link this to student council or school leadershi