Fundamentals of Accountancy, Business, and Management (FABM) 2 Practice Exam

Organizational structure shapes who is responsible for what, who reports to whom, and how information flows. When that design is weak, people can be unsure about their own roles and about who makes which decisions. This role ambiguity leads to duplicated efforts, gaps in accountability, and slow or muddled communication between departments. Decisions become bogged down because the wrong people may be consulted or critical information gets lost in transit, so performance suffers. It’s not that profits automatically rise, and it’s not realistic to expect faster decisions with no downsides, nor does a poorly designed structure give clear authority and responsibilities. The most likely and direct consequence is confusion about roles and a breakdown in communication.