Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What is one major disadvantage of tall organizations?

1. Increased delegation opportunities

2. Rigid supervision

3. Accelerated decision making

4. Lower administrative costs

The correct answer is: Rigid supervision

Tall organizations are characterized by a hierarchical structure with many levels of management. This often leads to rigid supervision, which can be a significant disadvantage. In a tall organization, the numerous layers of authority can create a slow and cumbersome decision-making process. Each level of management may need to review and approve decisions, which can hinder responsiveness and flexibility. Furthermore, because of this hierarchy, communication may become less effective, as information has to pass through multiple layers before reaching the necessary parties. This can lead to delays and potential miscommunication. In contrast, increased delegation opportunities, accelerated decision-making, and lower administrative costs are typically associated with flatter organizational structures, where there are fewer layers of management. These structures allow for more autonomy at lower levels and can enhance adaptability and responsiveness to changes in the business environment.