Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Which category of organization allows for flexible operations but tends to be vulnerable due to centralized control?

1. Adhocracy

2. Professional bureaucracy

3. Machine bureaucracy

4. Simple structure

The correct answer is: Simple structure

The simple structure is characterized by its flexibility and minimal hierarchy, allowing for quick decision-making and adaptability in operations. This type of organization often features a small group of key individuals, typically the owner or a small leadership team, who have a significant degree of control over the organization. While this centralized control can enable rapid responses to changes in the environment, it also creates vulnerabilities. If leadership becomes overwhelmed or if a key individual leaves, the organization may struggle to maintain its operations. In contrast, other organizational types like professional bureaucracy and machine bureaucracy have more established structures and procedures that can distribute decision-making authority, thereby reducing vulnerability. Adhocracies can be adaptable as well but usually have more decentralized control to foster innovation. Hence, the centralization of authority in a simple structure is what primarily contributes to its potential weakness while allowing flexibility in operations.