Orion Entertainment Private Limited (OEP)

Orion Entertainment Private Limited (OEP) is a leading entertainment service provider, offering television, internet, cinema, and more. The company's television division currently operates under a tall organizational structure, ensuring close supervision and efficient communication across seven hierarchical layers.

The CEO of OEP strongly believes that stringent oversight and minimal delegation are key drivers of employee performance and overall business success. However, the company has been facing significant challenges, including revenue constraints, rising operational costs, and stakeholder conflicts, largely due to intense competition, including from international players.

Following expert recommendations, OEP is now preparing to transition to a flatter organizational structure with fewer hierarchical layers. This shift will involve delayering and, to some extent, downsizing, as part of a strategic effort to enhance agility and efficiency in an increasingly competitive industry.

Questions:

Question 1: Define the term 'delayering’.[ 2 marks]

Question 2: Outline two features of a tall organizational structure [ 2 marks]

Question 3: Outline two features of a flat organizational structure. [ 2 marks]

Question 4: Explain the relationship between the ‘span of control; and organization structure’ [ 4 marks]

Question 5: Identify and explain two benefits to OEP of the proposed change in the organization structure [ 4 marks]

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Suggested answers:

Question 1: Define the term 'delayering’.[ 2 marks]

Delayering is the process of reducing the number of hierarchical levels in an organization’s structure. It involves removing layers of middle management to create a flatter structure, leading to improved communication, faster decision-making, and cost savings.

Question 2: Outline two features of a tall organizational structure [ 2 marks]

Multiple Hierarchical Levels – A tall organizational structure consists of many layers of management, often leading to a clear chain of command and well-defined roles and responsibilities.

Narrow Span of Control – Managers in a tall structure oversee fewer employees, allowing for closer supervision and more direct guidance, but potentially slowing down decision-making.

Question 3: Outline two features of a flat organizational structure. [ 2 marks]

Fewer Hierarchical Levels – A flat organizational structure has fewer layers of management, leading to a shorter chain of command and faster decision-making.

Wider Span of Control – Managers oversee a larger number of employees, promoting greater autonomy, communication, and flexibility within the organization.

Question 4: Explain the relationship between the ‘span of control; and organization structure’ [ 4 marks]

The span of control refers to the number of employees directly managed by a supervisor. In the context of OEP’s current tall organizational structure, the span of control is narrow, meaning each manager supervises only a few employees. This allows for close supervision but can slow decision-making and increase bureaucracy.

As OEP transitions to a flatter organizational structure, the span of control will broaden, meaning each manager will oversee more employees. This can enhance communication, reduce managerial costs, and promote employee autonomy, making the organization more agile and responsive to competition. However, it may also require employees to take on more responsibility and work independently.

Question 5: Identify and explain two benefits to OEP of the proposed change in the organization structure [ 4 marks]

Improved communication and decision-making

By reducing the number of hierarchical layers, information will flow more quickly between different levels of management and employees. This will lead to faster decision-making, enhanced collaboration, and a more agile response to market changes. In a competitive industry like entertainment, where trends shift rapidly, having a more flexible structure can help OEP stay ahead of its rivals.

Cost reduction and greater efficiency

Delayering and downsizing will help OEP cut administrative and managerial costs associated with maintaining multiple hierarchical levels. Fewer management positions mean lower salaries and reduced bureaucracy, leading to leaner operations. This cost efficiency can help OEP address its revenue constraints and allocate more resources toward innovation, content creation, and market expansion.

By transitioning to a flatter structure, OEP can enhance operational efficiency, foster a more dynamic work environment, and strengthen its competitive position in the entertainment industry.