2.

14 Delayering
term Delayering is the reduction of the number of management levels from bottom to top.
Many organisations are delayering. Middle line jobs are vanishing. Organisations are increasing the
average span of control, reducing management levels and becoming flatter.
(a) Information technology reduces the need for middle managers to process information.
(b) Empowerment. Many organisations, especially service businesses, are keen to delegate authority
down the line to the lowest possible level. Front-line workers in the operating core are allowed to
take decisions, in order to increase responsiveness to customer demands. This perhaps removes
the need for some middle management jobs.
(c) Economy. Delayering reduces managerial/supervisory costs.
(d) Fashion. Delayering is fashionable: if senior managers believe that tall structures are inherently
inflexible, they might cut the numbers of management levels.
This topic is also covered in Chapter 7, when discussing the impact of technology on the organisation.
3 Levels of strategy in the organisation
There are many levels of strategy in an organisation,
• Corporate: the genera! direction of the whole organisation
• Business: how the organisation or its^BUsitackle particular markets
1. Operational/functional: specific strategies for different departments of the business
•65535 Any level of the organisation can have objectives and devise strategies to achieve them. The strategic
management process is mujti-jayerejj.
It is generally agreed that there are three levels of strategy: corporate, business and
functional/operational. The distinction between corporate and business strategy arises because of the
development of the divisionalised business organisation, which typically has a corporate centre and a
number of strategic business units (SBUs).
Case Study
Chandler described how four large US corporations found that the best way to divide strategic
responsibility was to have the corporate HQ allocate resources and exercise overall financial control while
the SBUs were each responsible for their own product-market strategies. Functional operational strategies
can then be developed for component parts of SBUs.

3.1 Corporate strategies

fcf term Corporate strategy is concerned with what types of business the organisation is in. It 'denotes the most
general level of strategy in an organisation' (Johnson and Scholes).
Part A Business organisational structure, governance and management I la: Business organisation and structure
- structure and strategy