Edexcel GCSE Business: Organisational structures and job roles (1BS0)

This guide follows the Pearson Edexcel Level 1/Level 2 GCSE (9-1) in Business (1BS0) specification, Issue 2, July 2022. It covers Theme 2, Topic 2.5 Making human resource decisions, content items 2.5.1 (Organisational structures) and 2.5.2 (Effective recruitment). The formulae sit in Appendix 3 of the specification, and candidates do not receive them in the exam. Every business below is invented.

Course links: the Business hub, the printable checklist and the free diagnostics. Companion pages: the revision notes and the practice questions. For the growth decisions that make these choices necessary, see business growth and changing aims.

What the topic asks for

Item	You must be able to	Part
2.5.1	Explain hierarchical and flat structures, and centralised and decentralised decision making, and when each is appropriate	1
2.5.1	Explain why effective communication matters: the impact of too little or too much on efficiency and motivation, and barriers	2
2.5.1	Explain part-time, full-time and flexible hours; permanent, temporary and freelance contracts; the impact of technology (efficiency, remote working)	3
2.5.2	Explain key job roles and responsibilities: directors, senior managers, supervisors/team leaders, operational and support staff	4
2.5.2	Explain recruitment documents (job description, person specification, application form, CV) and internal and external recruitment	5

Appendix 1 defines the command words used in this guide. “Explain” wants one fact plus two expansion points and has no case. “Outline” wants two linked points tied to the case. “Justify” picks one of two options. “Evaluate” ends in a judgement backed by reasons. For “Calculate”, a calculator is allowed and the working should be shown.

1. Organisational structures

An organisational structure is the pattern of levels and reporting lines inside a business. The specification names two pairs.

Hierarchical and flat

• A hierarchical structure has many layers, from the top of the business down to the newest member of staff. Each manager looks after a small number of people. Instructions pass down and reports pass up, one layer at a time.
• A flat structure has few layers. Managers look after larger teams, and staff are closer to the people who make decisions.

A small ASCII picture shows the difference. Both show the same 49 people.

Hierarchical (4 layers)        Flat (2 layers)
1 director                     1 owner
3 managers                     48 staff
9 supervisors
36 operational staff

In the flat version the owner deals with every member of staff, which only works for a small team.

Hierarchical structures suit large businesses, or those where work must be checked, because everyone has a clear line of authority and there are clear promotion steps. The drawbacks are slow messages and high management salaries.

Flat structures suit small businesses, or those that value quick decisions. Messages travel quickly and managers cost less. The drawbacks are overloaded managers and few promotion steps.

Centralised and decentralised

• In a centralised structure, important decisions are made at the top, usually by head office or the owner. This gives consistency and tight control. It is appropriate when a business is small, when mistakes would be costly, or when every branch must act in the same way.
• In a decentralised structure, decision making is passed down to managers and teams in each branch, department or region. This is appropriate when a business has grown, when local knowledge matters, or when staff are skilled enough to be trusted. Decisions are quicker and local managers feel trusted, but different parts of the business may act inconsistently.

Hierarchical describes the number of layers. Centralised describes where decisions are made. A flat business can still be centralised if the owner decides everything.

Worked example: Brackett Dental

Brackett Dental began as one surgery, with the owner approving every purchase. After growing to four branches, a request for a new chair took five days to be approved. The owner moved to a decentralised structure, letting each branch manager approve purchases up to a set limit.

• Decision time fell from 5 days to 1 day: (5 - 1) / 5 × 100 = 80% shorter.
• The benefit is quicker decisions. The risk is that branches buy different equipment, so costs rise.

Centralised control fitted one site but not four, which is the point a “when is it appropriate” answer must make.

2. The importance of effective communication

Effective communication means the right message reaches the right person at the right time, in a form they can use. Staff who know what to do work more efficiently, and staff who feel informed feel valued, which supports motivation.

Insufficient communication

When too little is shared, tasks are done twice or not at all and customers get conflicting answers, so efficiency falls. Staff who hear about changes late may feel ignored, so motivation falls too.

Excessive communication

Too much causes its own harm. Staff spend time on emails, meetings and replies that do not concern them, so there is less time for the job, and important messages are lost in the noise. Staff may also feel their time is wasted, which lowers motivation.

Barriers to effective communication

A barrier is any obstacle that prevents a message arriving or being understood. Typical barriers are:

• Unclear wording or jargon.
• A poor choice of method, such as a long instruction sent as a quick text.
• Language differences.
• Faulty technology, such as a weak signal.
• Many layers in a structure, so a message changes as it is passed along.
• Noise, distance or distraction.

Worked example: Holm Brewing

At Holm Brewing the 15 staff each attend 7.5 hours of meetings in a 37.5-hour week.

• Share of the week in meetings = 7.5 / 37.5 × 100 = 20%.
• The manager cuts meetings to 4.5 hours, so the share is 4.5 / 37.5 × 100 = 12%.
• Time freed for the whole team = (7.5 - 4.5) × 15 = 45 hours a week.

This is excessive communication. Keep the meetings that matter and replace the rest with a short weekly summary. Cutting all meetings would create the opposite problem.

3. Different ways of working

Hours: full-time, part-time and flexible

• Full-time staff work the business’s standard full week. They give continuity and know the business well, but cost more in total.
• Part-time staff work fewer hours than a full week. The business can match staffing to busy periods. It may need more people to cover the same hours, which adds to recruitment and training.
• Flexible hours gives the worker some choice about when hours are worked. It can help staff balance work and home life and support motivation, but cover and meetings are harder to arrange.

Worked example: Tarrow Cycles

Tarrow Cycles has 4 full-time staff on 37.5 hours and 3 part-time staff on 16 hours, all paid £12.40 an hour.

• Weekly hours = 4 × 37.5 + 3 × 16 = 150 + 48 = 198 hours.
• Weekly wage bill = 198 × 12.40 = £2,455.20.
• Part-time staff do 48 / 198 × 100 = 24.2% of the hours but make up 3 / 7 = 42.9% of the staff.

So part-time working means more people to train and keep informed.

Contracts: permanent, temporary and freelance

• A permanent contract has no planned end date. It gives security and a stable team, but the business must keep paying if demand falls.
• A temporary contract lasts for a fixed period or task, such as a seasonal rush. It is flexible, but the worker may know less and be less committed.
• A freelance worker is self-employed and is paid for the job, not as a member of staff. The business gets specialist skills only when needed, but the hourly rate is high and the freelancer may be unavailable later.

Worked example: Pellam Stationers

Pellam needs a catalogue designed. A freelance designer would charge £32 an hour for 90 hours. A temporary worker would be hired for 6 full-time weeks (37.5 hours) at £14.50 an hour.

• Freelance cost = 32 × 90 = £2,880.
• Temporary cost = 14.50 × 37.5 × 6 = £3,262.50.
• The freelancer is £382.50 cheaper, because they work 90 hours, not the 225 hours the temporary worker is paid for.

Cost is not the only factor. A temporary worker can be moved to other jobs, which a freelancer cannot.

Technology and ways of working

• Efficiency. Shared files, messaging apps and automated systems let tasks be finished faster and with fewer errors. The business needs to spend on equipment and training, and suffers if systems fail.
• Remote working. Staff work from home or away from the business site. The business can cut office costs and recruit from a wider area, and staff save travel time. The drawbacks are weaker team contact and harder supervision.

4. Job roles and responsibilities

The specification lists five groups. Duties differ between businesses, but the general pattern is:

Group	Typical responsibilities
Directors	Set the overall direction and aims, approve major decisions and answer to the owners
Senior managers	Turn the directors’ plans into plans for a department, such as marketing or operations, and manage those below them
Supervisors/team leaders	Organise the daily work of a small team, check it, deal with problems and pass information up and down
Operational staff	Carry out the main work of the business, such as making the product, serving customers or delivering orders
Support staff	Help the others do their jobs, for example through administration, cleaning, reception, IT help or payroll

A message from a director reaches operational staff through senior managers and supervisors. The more groups it passes through, the more chances for it to be changed.

5. How businesses recruit people

Recruitment documents

• A job description covers the post itself: the title, the duties, the line manager, the location and the working hours.
• A person specification sets out the qualities needed in the person: qualifications, skills, experience and personal qualities. Candidates are measured against it.
• An application form is designed by the business and asks every candidate the same questions, so candidates are easy to compare.
• A CV (curriculum vitae) is written by the candidate and summarises their education, experience and skills. Each CV has a different layout, so comparing them is harder.

Internal and external recruitment

• Internal recruitment fills the post from current staff. It is cheap and quick, the person knows the business, and it motivates others by showing promotion is possible. It brings no new ideas and leaves a gap elsewhere.
• External recruitment looks outside the business, for example through adverts or an agency. It gives a larger pool and new skills and ideas, but costs more, takes longer, and the new person must learn the business.

The method should meet the business’s needs. A business needing new skills usually looks outside. One wanting to reward loyal staff and fill a post quickly may look inside.

Worked example: Ravenscar Tiles

Ravenscar Tiles needs a supervisor on £28,500 a year. External recruitment would cost a £640 advert plus an agency fee of 12% of salary. Internal recruitment would cost £450 of extra training.

• Agency fee = 0.12 × 28,500 = £3,420.
• External total = 640 + 3,420 = £4,060.
• Internal total = £450, a difference of 4,060 - 450 = £3,610.

If 64 people apply and 8 are shortlisted, 8 / 64 × 100 = 12.5% reach the shortlist. Internal is cheaper, but only works if a suitable person is already employed.

Common errors

• Calling a structure “flat” because it is small. Flat means few layers.
• Mixing up hierarchical (layers) with centralised (where decisions are made).
• Saying decentralised is “better” with no link to the size, location or skills in the case.
• Writing that more communication is always better. Too much harms efficiency.
• Treating freelance and temporary as the same. A freelancer is self-employed and paid for the job.
• Mixing up a job description (the job) with a person specification (the person).
• Giving a calculation answer with no workings or no units.

Next, use the practice questions.

Frequently asked questions

Can a flat structure be centralised? Yes. Hierarchical and flat describe the number of layers, while centralised and decentralised describe where decisions are made, so a flat business can still be centralised if the owner decides everything.

Can a business have too much communication? Yes. Excessive communication means staff spend time on emails and meetings that do not concern them and important messages get lost, which lowers efficiency and motivation.

What are the barriers to effective communication? Typical barriers include unclear wording or jargon, a poor choice of method, language differences, faulty technology, many layers in a structure, and noise, distance or distraction.

What is the difference between a CV and an application form? A CV is written by the candidate and summarises their education, experience and skills in their own layout. An application form is designed by the business and asks every candidate the same questions, so candidates are easier to compare.

Official syllabus

Pearson Edexcel Level 1/Level 2 GCSE (9-1) in Business (1BS0), Specification, Issue 2, July 2022, published by Pearson Education Limited. Theme 2: Building a business, Topic 2.5 Making human resource decisions, items 2.5.1 and 2.5.2.