Business Studies Case Study

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Peter Nicholson wishes to convert the factory in the north east to production of the electric taxi. Using data in Appendix C, Table 1, calculate payback period and the average rate of return.
(8 marks)

Peter Nicholson proposes to remove two management levels from the organisational structure and to encourage greater empowerment of the workforce. Do you think that this is a good idea? Justify your view.
(18 marks) I believe that delayering the organisational structure by two management layers will encourage greater empowerment of the workforce. He would do this by flattening the organizational hierarchies whereby layers in management are removed and the existing managers’ span of control is broadened. It is believed that flattening hierarchies has numerous benefits but on the flipside, negative effects may be experienced.
The rationale or thinking behind delayering or flattening is that it leads to streamlining organizations to enhance efficiency in responding to changes in the market, stay competitive (competitive advantage) and respond to customer needs faster. The implication is that besides reducing or controlling costs, flattening an organization structure’s benefits emanate from changes in governance internally whereby when decision are pushed downwards to kaizen groups, other employees are empowered (can make decisions and feel relevant), responding to customer needs becomes easy and fast , enhances accountability and boosts staff morale. A good example is signing of memos or seeking approvals to refund a customer. If the levels are many, then it could take many hours or even days to refund but when the organization is flat with few levels of management, decision to refund is made there and then.
By removing 2 management levels this decreases the businesses cost by not having to pay 10 managers salaries which are very high, this would mean that in the long term the company would save a huge amount of money which in turn means that

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