its structure that have been good for the company. A revised organisational
chart is particularly useful for informing people about the new structure
of the company after mergers or take-overs.
The organisational chart can also be used during an induction period to
give new employees a useful overview of the company and their own position
within the structure in terms of their authority and the managers to whom
they are responsible. Although an organisational chart has several uses, it
should not be taken as giving an exact description of how the organisation
actually operates. It does not give the exact nature of job
responsibilities or indicate what levels of cooperation may be necessary
between departments.
Function 1.7: Line authority in a production department.
Chain of command - is the line of command flowing down from the top to the
bottom of an organisation. It passes down the management hierarchy, from
director and senior management levels to those in middle and junior
management positions and eventually to employees in supervisory jobs who,
for example may have authority over assembly line workers or staff
providing services to the organisation’s customers. Organisations with a
long chain of command - with a hierarchy made up of many levels of
management - are said to have tall organisational structures.
Span of control - refers to the number of subordinates a manager is
responsible for and has authority over. Organisations with a long chain of
command will tend to have narrow spans of control. Organisations with a
short chain of command tend to have wider spans of control. This produces a
flat organisational structure because it has a hierarchy with fewer levels
of management.
Flat organisational structures: are generally desirable, there is a limit
to the number of subordinates who can be placed under one superior. Even
very experienced managers who have the qualities and personalities that
promote loyalty and hard work can only be responsible for so many
employees.
Tall organisational structure : some organisations have many levels and
grades of staff with a tree-like management structure and strong patterns
of vertical communication. This means that there are many different grades
of staff between people lower down the organisation and the person at the
top. Tall organisations suffer from problems with bureaucracy, as
information needs to be directed through the correct channels before
appropriate action is taken.
The main features of such a structure are as follows:
6. At each level there are several staff responsible to a person at the
next level up. The process is repeated until the top of the
organisation is reached.
7. In a limited company the person at the top is the Managing Director
who is ultimately responsible for the whole organisation.
8. As the levels within the organisation are ascended, the number of
people at each level decreases and this gives the organisation a
pyramidal structure.
In an organisation with flat structure there are fewer levels or grades of
staff and much more emphasis on communication across the organisation. This
is more likely to be the structure of a small business where everyone knows
each other and works together more as a team.
In some situations, however, a relatively wide span of control may be
acceptable if:
9. The potential disadvantages of a wide span are outweighed by the costs
of employing the extra managers needed to produce narrower spans of
control.
10. Junior employees are engaged mainly in routine work and as a result
the manager is required to make relatively few decisions.
11. Managers are willing to reduce the pressure on their own time by
delegating more decision making and they can identify staff who are
likely to respond well to the extra responsibility.
12. An effective range of financial and non-financial motivational factors
produces a committed group of people who need very little supervision.
13. The group within the span are highly skilled or talented and are given
a great deal of scope to be creative and imaginative in their work.
Line structure
In a line structure, a company is usually organised into functional
departments, each headed by a senior manager, below whom there is a chain
of command. This indicates that there is a line of authority and
responsibility as one goes down the structure.
Each person in the line has authority over those below, while being
responsible for making sure that the work handed down to them from their
immediate manager is completed. This applies even if the subordinate does
not personally undertake the actual work.
Advantages:
14. It is hierarchical structure which is simple to understand - staff
know precisely where they are in the structure, who can allocate work
to them and to whom they are responsible.
15. Managers have a clear understanding of the roles of people when
allocating work and spend less time monitoring work because
subordinates are not distracted or confused by instructions from other
sources.
16. A well-established line authority makes it possible for work to be
delegated further down the line - this can be valuable when superior
is seeking to widen the experience subordinates and develop their
management or supervisory skills.
Disadvantages:
17. It can involve a very long chain of command - instructions may take a
considerable time to filter from the top and impact on production,
which can be an important drawback if the organisation operates in a
rapidly changing market.
18. The flow of information back up a long chain to management may be a
lengthy process, causing a considerable delay before problems are
identified and tackled.
19. Individuals might only respond to requests from the superior, creating
inflexibility in the organisation which may be totally unnecessary if
co-operation with other managers does not effect working relations
with their superior.
Line and staff structure
A line and staff structure combines both a line authority and what is known
as staff authority. The term staff authority refers to those staff, usually
at a relatively senior level, whose are of work often involves dealing with
different departments. Someone with the relevant staff authority can
provide services and advises to those in the line of authority of other
departments. Managers with staff authority do not have the power to control
or give instructions, but rather the authority to deal with different
departments and to offer advice or support services in relation to problems
or exploiting new opportunities. However, since those with staff authority
are appointed because of their expertise, experience and good personal
skills, their advice, though not binding, is likely to be very persuasive.
20. Staff authority enables the expertise and experience of specialists to
be utilised more fully across the organisation.
21. By having access to all areas of the company, managers with staff
authority, communications between departments are at director level,
and so any inter-departmental communication has to pass up the chain
of command in one department to director level and then down the other
before it reaches the appropriate level.
22. Staff authority prevents individual departments from being too inward
looking - departments remain aware of their interdependence and their
role in seeking to achieve the organisation’s objectives.
There is a risk that staff authority may diminish the authority of
individuals in the line management, particularly if those with staff
functions acquire informal power and authority.
Matrix structure
In a matrix structure, a senior manager heads a division or team of
specialists drawn from different departments. These specialists are also
located in departments where they are part of a line authority; they are
therefore subject to two sources of authority.
In a matrix structure the simple chain of command found in a line structure
is replaced by a very large number of reporting relationships as
individuals report to managers in more than one department or function.
A matrix structure may be used for just some of an organisation’s
activities or it may cover the whole work of the organisation. It is often
used for organising and managing project teams, where people with
specialist skills, perhaps from different levels in the hierarchy, are
brought together to solve complex and urgent problems. Project teams may be
created to deal with issues which arise every now and again or they may be
an ongoing feature of the organisational structure.
Some aspects of marketing, however, may be handled by an ongoing project
team drawn from other departments, although the membership of the group may
change as different marketing issues arise.
23. It promotes increased co-ordination between departments because it
cuts across departmental boundaries - it encourages greater
flexibility and creativity, produced by the cross-fertilisation of
knowledge and skills.
24. It allows for the involvement of relatively junior staff, giving them
valuable experience in a wider field for the expression and
application of their particular skills.
25. Staff lower down a line structure can also gain valuable management
development in a project team, preparing them for promotion to higher
management positions.
26. The involvement of specialists from different areas reduces the risk
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