Read business functions and organisation charts
Relate functional departments and simple hierarchy features to how work is coordinated.
Exam scope and assessment notes
Cambridge IGCSE Business Studies 0450, 2026 syllabus, Version 2. Use the 2026 A*–G route; this qualification changes to 0264 for first assessment in 2027. Candidates are not assessed on constructing income statements or statements of financial position, nor on price-elasticity or exchange-rate calculations. Simple cash-flow forecast construction is assessed. Written practice is self-checked, not an official Cambridge grade; timed-paper evidence and human subject-teacher review remain outstanding.
Before you begin
- No previous business study is assumed. Read each scenario for the people affected, the business objective and any limits on time, cost or information.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
Which function is most directly responsible for producing goods?
What you will learn
- Recognise common functional areas
- Interpret simple hierarchy features
- Use organisational charts to identify reporting lines
Group related work into functions
Common functional areas include operations, marketing, finance and human resources. Operations produces goods or delivers services; marketing connects the offer with customers; finance manages financial information; human resources supports the workforce.
Functions depend on one another. Marketing forecasts may inform operations planning, while finance helps assess whether a proposed plan is affordable.
Read the organisation's structure
A hierarchy shows levels of authority. A tall structure has more layers than a flatter one; a chain of command shows who reports to whom; span of control is the number of subordinates directly managed by one manager.
An organisation chart represents reporting relationships but does not show every informal conversation or decision. Read the lines and labels rather than assuming that a department's position proves its importance.
Pause and explain
A span of control counts which employees?
Worked example
In a simple chart, three sales assistants report to a supervisor who reports to a store manager. State the supervisor's span of control and one reporting relationship.
Show the worked solution
- Count only direct reports to the supervisor.
- Follow the chart lines upward.
- Do not include the store manager in the direct-report count.
Answer The supervisor's span of control is three. The supervisor reports to the store manager.
Try a topic test
Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
A small online shop plans orders, advertises products, tracks cash and hires staff. Match each task to a suitable function.
Give me a hint
Use the tasks rather than the business's size to classify them.
Compare my reasoning
- Order fulfilment is operations.
- Advertising is marketing.
- Cash records are finance; hiring belongs to human resources.
Order fulfilment: operations; advertising: marketing; cash records: finance; hiring: human resources. In a small business, one person may perform several functions.
Look for these in your work
- All four functions matched
- Function purpose understood
- Small-business overlap acknowledged
A team leader has six direct reports, and each reports to a department manager. What is the team leader's span of control? How many levels are shown from a worker to the department manager?
Give me a hint
Count direct reports and follow the chart's authority lines.
Compare my reasoning
- Six people report directly to the team leader.
- The worker reports to the team leader.
- The team leader reports to the department manager.
The team leader's span of control is six. There are two reporting steps from a worker through the team leader to the department manager.
Look for these in your work
- Direct reports counted
- Reporting steps traced
- No extra levels assumed
A marketing team forecasts a campaign that may double online orders. Explain one reason it should coordinate with operations and one with finance.
Give me a hint
Follow the impact on capacity and affordability.
Compare my reasoning
- Operations needs to assess stock and delivery capacity.
- Finance needs to forecast campaign cost and cash needs.
- Coordination reduces mismatches between demand and resources.
Marketing should coordinate with operations so stock and delivery can meet likely demand, and with finance to assess campaign cost and cash requirements. Without coordination, the business could pay for demand it cannot serve or lacks funds to support.
Look for these in your work
- Operations link explained
- Finance link explained
- Coordination effect stated
Common mistakes
- Counting indirect reports as part of a manager's span
- Assuming every business uses the same departments
- Treating a chart as proof of informal influence
What can you explain now?
Which function is most directly responsible for producing goods?
Compare with the explanation
Operations
Operations organises production or service delivery.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
What does an organisation chart show, and what does it leave out?
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.