Business Studies - Organizational Structure Assess the consequences for Poppies if de-stratification is allowed (16 points) De-stratification is the process of removing levels from within a company. The main reason for doing this is to reduce costs, however there can be many consequences if stripping is done. Some positives might be that, in the long run, removing a layer from a company should lead to a reduction in costs. The reason for this is that you will no longer have that part of your business on your payroll, meaning you will no longer have to pay them a salary. The downside is that in the short term you may have to pay severance pay to workers at the level you removed. Removing a level of a company can also be seen as a method of reducing your business. This is the opposite of what Tim wanted to do with his expansion plans. Conversely, de-stratification may lead Tim to have to hire new staff for new work purposes. This would be an expansion and would also give Tim the ability to hire “enough staff of the right quality”, something he was previously worried about. However, as I said, de-layering should in the long term reduce costs and therefore increase the financing possibilities towards expansion. Another effect of de-layering is that it increases decision making and decreases communication channels. This means there are fewer people to screen and therefore fewer people to confirm with what needs to happen. For this reason it is necessary to improve efficiency within the company when orders are given. The negative aspects must also be considered. Probably one of them is that employees would be given more responsibility and more authority, something Tim specifically wanted to achieve by store managers or by retraining store staff assistants. This would however come at a cost as you would have to pay for redundancies, but it would be much less than if you had to remove the buyer layer. It may also involve the cost of having to retrain managers or assistant store staff on how to perform the supervisor role and may require higher pay. Overall I think it would be better to split the task into multiple levels and do it by removing the supervisor level. This is because removing this layer would cost less financially and lead to more benefits, such as faster decision making and, hopefully, a more efficient business. However I would also suggest that Tim allows smaller decisions, such as whether a store is allowed to reorder new stock, to be up to individual store managers.