Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What best describes a tall organization?

1. An organization with a large number of management levels

2. An organization with few management levels

3. An organization with equal levels of management

4. An organization with a flat structure

The correct answer is: An organization with a large number of management levels

A tall organization is characterized by having a large number of management levels, which creates a hierarchical structure. In these organizations, there are multiple layers of management between entry-level employees and top executives. This structure can lead to clear lines of authority and responsibility, allowing management to maintain closer oversight over operations and employees. Taller organizations typically exhibit longer chains of command, which may result in more detailed supervision and support for staff at various levels. This organization type often benefits from specialization since each level can focus on different layers of management. However, taller structures can also lead to challenges, such as potential communication barriers and slower decision-making processes due to the multiple levels of hierarchy through which information must flow. In contrast, organizations with fewer management levels would be classified as flat organizations, promoting a more decentralized approach and potentially faster decision-making. Equal levels of management imply a lack of hierarchy, which does not reflect the tall structure. Therefore, having a large number of management levels is the defining characteristic of a tall organization.