Business 7115 · O Level · Organisation and management
Organisation and management — practice question
FGH is a private limited company. Its organisational structure is a tall hierarchy. It operates as a book retailer and intends to acquire one of its rivals for $800\text{m}$. If the acquisition goes ahead, FGH would operate $6500$ bookshops in $20$ countries. FGH’s Managing Director stated: “We expect to cut total costs by $300\text{m}$ a year once the takeover is completed. We will end all off-the-job training for employees.” The Managing Director believes FGH would gain from converting into a public limited company, although some of the other directors are unsure whether this would be a wise move.
(a)[2]
What does ‘off-the-job training’ mean?
(b)[2]
What does the term ‘total cost’ mean?
(c)[4]
Identify and explain two advantages that FGH gains from having a tall hierarchical organisational structure.
(d)[6]
Identify and explain one advantage and one disadvantage to FGH of converting into a public limited company.
(e)[6]
Do you think FGH should proceed with the takeover of the other business? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Training carried out away from the workplace by specialist trainers” …