A flatter organizational structure reduces hierarchical levels and promotes greater autonomy for employees. The primary benefit is cost reduction due to fewer management layers and streamlined decision- making.
* Fewer Management Layers - Reduces the number of mid-level managers, decreasing salary expenses.
* Increased Operational Efficiency - Less bureaucracy leads to faster decision-making, lowering administrative costs.
* Encourages Employee Autonomy - Reduces dependence on supervision, improving productivity.
* B. Slower decision-making at the senior executive level - Incorrect because flatter structures lead to faster decision-making due to fewer approval levels.
* C. Limited creative freedom in lower-level managers - Incorrect because flatter structures provide more autonomy and innovation opportunities.
* D. Senior-level executives more focused on short-term, routine decision-making - Incorrect because executives in a flatter structure focus on strategic, high-level decisions, delegating routine tasks.
* IIA's GTAG on Governance and Risk Management - Discusses the financial and operational impacts of different organizational structures.
* COSO's Enterprise Risk Management (ERM) Framework - Emphasizes how flatter structures reduce operational inefficiencies and costs.
* COBIT 2019 (Governance Framework) - Highlights the impact of organizational structure on financial performance.
Why Lower Costs is the Correct Answer?Why Not the Other Options?IIA References: