O Level Business: Organisation and management (Cambridge 7115) – Revision Notes

These notes condense section 2.2 Organisation and management of the Cambridge O Level Business Studies 7115 syllabus for examination in 2026. For full explanations and worked examples, read the study guide. Then test yourself with the practice questions. The wider topic is summarised in the People in business revision notes. Course pages: the Cambridge O Level Business hub and the printable checklist. To see where you stand first, take a free 10-minute diagnostic.

2.2.1 Organisational charts

Definitions

Term	Meaning
Organisational chart	Diagram of posts, reporting lines and levels
Level of hierarchy	One layer of authority on the chart
Chain of command	Line of authority from the top to the bottom of the business
Span of control	Number of people reporting directly to one manager or supervisor
Tall structure	Many levels, usually narrow spans
Short structure	Few levels, usually wide spans

Roles

Post	Main responsibility	Reports to
Director	Long-term direction, objectives, major decisions	Owners or shareholders, in a company
Manager	Plans and runs a department to meet the objectives	Director
Supervisor	Oversees daily work of a small team	Manager
Other employees	Carry out the tasks and report problems	Supervisor or manager

Inter-relationships: targets and instructions flow down; results, problems and ideas flow up; managers in different departments coordinate sideways.

Method: reading a chart

1. Count the levels from the top post to the lowest.
2. For span of control, count only the direct reports of one post.
3. For the chain of command, list each post from the bottom to the top.
4. To compare structures, state levels and spans for both, then link to speed, cost and supervision.

Small worked reminder: Garnetfield Pottery

Garnetfield Pottery is an invented business with 1 director, 2 managers and 8 potters (4 per manager).

• Levels: 3.
• Director’s span: 2. Each manager’s span: 4.
• Total employees: 1 + 2 + 8 = 11.
• If a third level of supervisors were added with 2 potters each under 4 supervisors (2 per manager), the structure gets taller and each manager’s span falls to 2.

Tall versus short

	Tall	Short
Communication	Slower, more steps	Faster, fewer steps
Supervision	Close	Looser
Management salaries	Higher	Lower
Promotion steps	Many	Few
Suits	Work needing close checking	Skilled staff who need freedom

2.2.2 The role of management

Five functions

Function	One-line meaning
Planning	Set objectives and decide how to reach them
Organising	Arrange people, resources and money to carry out the plan
Coordinating	Make departments work towards the same aims
Commanding	Give instructions and direct staff
Controlling	Compare results with the plan and act on gaps

Memory aid: plan, organise, coordinate, command, control. The syllabus gives these as examples (“e.g.”), so a question may describe an action without naming it. Match the action to the function.

Delegation

• Definition: passing authority to carry out a task, and to make decisions about it, to someone lower in the hierarchy. The manager stays accountable.
• Benefits: frees managers for planning, uses staff skills, motivates, trains future managers.
• Risks: mistakes, lack of skill or time, a task done differently from how the manager would do it.

Trust versus control

	Trust	Control
Gains	Motivation, speed, manager’s time freed	Fewer errors, consistent standards
Losses	Errors may go unseen	Slower, staff feel distrusted, manager overloaded
Fits	Experienced staff, routine or low-risk jobs	New staff, high-risk or costly jobs

2.2.3 Leadership styles

Style	Decisions	Communication	Best when	Weakness
Autocratic	Leader alone	Mainly downwards	Urgent decisions, inexperienced staff, emergencies	Demotivating, ignores staff knowledge
Democratic	Leader consults and often shares decisions	Two-way	Skilled staff, complex decisions, commitment needed	Slower, possible disagreement
Laissez-faire	Staff decide how to work	Little, on request	Expert or creative staff	Lack of direction, work may drift

Method: recommend and justify

1. Name the style.
2. Quote two details from the case (staff skill, urgency, size of team, type of task).
3. Explain why the style fits those details.
4. State one limitation.
5. Compare with the main alternative and finish with a clear judgement.

2.2.4 Trade unions

• Definition: an organisation of workers formed to protect and improve its members’ pay, conditions and interests, acting together.
• Effects on employees: stronger bargaining power, support in disputes, better representation, but a subscription and possible calls to take industrial action.
• Effects on the business: higher costs from pay and conditions agreements, possible disruption, slower change; but a single channel to talk to staff, fewer unresolved disputes and often lower labour turnover.

Small worked reminder

14 of 40 employees are union members: 14 ÷ 40 = 35%. A 5% rise on a wage bill of 480,000 dollars costs 480,000 × 5% = 24,000 dollars a year.

Applying the content to a case

Recommend and justify: a short model

Case: a small bakery chain has 10 bakers who are new to the job and a large rush order due tomorrow morning.

• Style: autocratic.
• Detail 1: the deadline is tomorrow, so there is no time for discussion.
• Detail 2: the bakers are new and need clear instructions.
• Limitation: the bakers may feel their ideas are ignored if this is the usual style.
• Judgement: for this order, one clear set of orders is the better choice. After the order, a more democratic approach would build skills and motivation.

Linking the four parts together

The four syllabus points connect, and the best answers use the links.

• A wide span of control forces managers to delegate, because they cannot supervise everyone closely.
• Delegation works best with trust, which suits a democratic or laissez-faire style and skilled staff.
• A tall structure with close control often goes with an autocratic style.
• A union gives staff a collective voice, which can feel like a limit on an autocratic leader and a help to a democratic one.

Command words in this section

Command word	What to do here
State, identify	Give the term or function, no explanation needed
Define	Give the meaning in one precise sentence
Calculate	Show the working and give the answer with units or a percentage sign
Explain	Give a point, then a reason or consequence
Analyse	Break the effect into a chain of cause and result in the case
Recommend and justify	Choose one option, support it with case details and give a limitation
Evaluate	Weigh both sides, then reach a reasoned judgement

Must-know distinctions

• Span of control versus levels: span counts people across one manager’s team; levels count layers from top to bottom.
• Delegation versus abdication: delegation passes a task but keeps accountability. Handing over a task and ignoring it is not good delegation.
• Commanding versus controlling: commanding gives instructions before the work; controlling checks results afterwards.
• Planning versus organising: planning decides what and why; organising arranges who and with what.
• Laissez-faire versus poor management: the leader still sets the broad aims.
• Democratic versus autocratic: both can lead to good decisions; the difference is who is involved.

Quick self-test

1. State the five functions of management named in the syllabus.
2. A supervisor has 8 staff reporting to her, and she reports to one manager. What is her span of control?
3. A business removes one level of hierarchy. What usually happens to spans of control?
4. Give one benefit and one risk of delegation.
5. Which leadership style is most likely to suit an urgent safety decision?
6. Which function of management compares actual sales with the sales target?
7. Define a trade union.
8. A business has 36 operatives and 3 managers and no supervisors. What is each manager’s span, if the operatives are shared equally?
9. Give two ways a union can raise a business’s costs or slow decisions.
10. Give one possible benefit to a business of having a recognised union.

Answers

1. Planning, organising, coordinating, commanding, controlling.
3. Spans of control usually widen.
4. Benefit: frees the manager’s time, or motivates staff. Risk: the employee may make mistakes.
5. Autocratic.
6. Controlling.
7. An organisation of workers formed to protect and improve its members’ pay, conditions and interests.
8. 36 ÷ 3 = 12.
9. Pay and conditions agreements raise costs; industrial action disrupts output; consultation slows change.
10. A single channel for communication, fewer unresolved disputes, or lower labour turnover.

Where marks are usually lost

• Counting the wrong people when finding a span of control.
• Defining delegation as “giving a job” without the passing of authority.
• Listing the five functions but not matching a described action to the right one.
• Recommending a leadership style with no reference to the details in the case.
• Giving only the advantages of a style, structure or union, with no limitation.
• Writing only negative effects of unions.
• Saying a short structure is simply “better” or “cheaper” without a condition.
• Confusing coordinating (linking departments) with commanding (giving orders).
• Ending an evaluation without a clear judgement.

Frequently asked questions

What is the difference between a tall and a short organisational structure? A tall structure has many levels of hierarchy, usually with narrow spans of control. A short, or flat, structure has few levels, usually with wide spans of control.

What is the difference between delegation and giving someone a job? Delegation passes the authority to carry out a task and make decisions about it to someone lower in the hierarchy, while the manager remains accountable. Simply handing out work does not pass that authority.

Does laissez-faire leadership mean no management? No. Under a laissez-faire style the leader still sets the aims but leaves staff free to decide how to reach them.

What does trust versus control mean in delegation? Trust means letting staff decide for themselves, which builds motivation but may let errors go unnoticed. Control means checking and approving, which reduces errors but slows work, so the right balance depends on the employee and the task.

Official syllabus

Cambridge International, Cambridge O Level Business Studies (7115) syllabus for examination in 2026, subject content section 2.2 Organisation and management.