Morrisons

1) Assess the possible impact on Morrisons of using a flatter organization structure

(10m)

A flatter organizational structure is characterized by fewer levels of management and

decision-making distributed over the different departments of the organization. Meaning,
the chain of command is short, but the span of control is wide. Therefore, employees are
free from strict and in close control in the workplace, giving them more freedom and
responsibility.

The potential impacts of Morrisons using a flatter organizational structure can have both
positive and negative outcomes.

One positive outcome of using a flatter organization structure is that it would be more
efficient. Flatter organizational structure decreases the chain of command, due to the fewer
layers of management, that would reduce the levels of bureaucracy, and communication
can be quicker and shorter, that decreases the possibility for messages to be distorted. By
adding more important tasks and responsibility from the promotions that Morrisons makes,
workers now have the motivation and positive attitude to lead the company to success. This
freedom of solving their own problems, would make their work more interesting. This way,
workers learn to be more creative and learn to perfect the skill of multitasking and
managing your people in new and improved methods, that would give Morrisons the
opportunity to get ahead of some of their competitors like LIDLE and ALDI. In addition,
decision making may also be faster because the approval of several managerial layers is not
required. It being the 4th largest supermarket in the UK, it must get back on its feet fast. A
lot at stake and things must be done correctly and quickly, in order to keep their status and
reputation.

One of the most important positive outcomes of using a flatter organization structure is the
cost savings. A flatter organizational structure gets rid of the need for too many middle
managers, reducing the company’s wage bill. After their finical loss, and decreased revenue,
of last year (2014), Morrisons would be able to pay off any debts and have the opportunity
to be a more flexible. Having a flexible workforce means employees can work in flexible
hours or as hybrid (from both home and the office). Creating employee satisfaction and
loyalty to the business. By cutting down on employees the would also have more money to
be elastic with their set prices. They could also achieve customer loyalty by being able to
afford coupon deals or BOGOF SALES for example.

However, by decreasing the number of staff, workload would increase dramatically as they
would have to take on more tasks, since the middle management level is eliminated, and
the senior management level must manage more people. Moreover, there could also be a
co-ordination problem if mangers are responsible for too many subordinates. With fewer
management layers, there is a high probability that departments will become less
coordinated and cooperative with one another. Managers may lose control of the
workforce because the span of control is too wide. Employees might come to the realization
that this tremendous amount of work, and the amount of money they are getting paid to do
it, simply does not add up. By over working staff, they may get demotivated, and as a result
discipline might be lacking, which would have an overall great impact on the company as a
whole, and employees start to realize that the job they are required to do is not worth the
money they are getting paid for it. Because of the layer cuts, departments are forced to
merge, but with this new system, employees are getting paid less for more work, the work
that would have been done my all the managers that were let go. This would certainly make
the workers less motivated.

In conclusion, Morrisons can experience a range of potential impacts if they adapt to a

flatter organizational structure. Even though there are some valid negative impacts,
positives such as cost efficiency and aster communication that lead to many other actors
such as customer loyalty and less competition outweigh all the negatives.