2. Introduction
An organization structure is mainly concerned with the allocation of duties and
responsibilities and delegation of authority.
Organisation is designed on the basic of principles of labour and span of
management.
The success of the organisation depends upon the experience and competence
of the officers of the organisation.
Nature, scale and size of the business are the normal factors which determine
forms of internal organisation.
3. The following common types of organisation find a place in the structure
of internal organisation
o Line, Military or scalar organisation
o Functional organisation
o Line and staff organisation
o Committee organisation
4. Line Organisation
• Line organisation is the simple and oldest type of organisation followed
in an organisation.
• Under line organisation, each department is generally a complete
self-contained unit.
• A separate person will look after the activities of the department and
he has full control over the department.
• It is direct vertical relationship through which authority flows.
• Authority flows vertically from top to bottom for execution of work.
5. Line Organisation
• The same level executives do not give or receive orders amongst themselves.
• But they receive orders from their immediate boss and give orders to their
subordinates. Hence, all the heads are responsible to the general manager, the
general manager, in turn, is responsible to the shareholders who are the
owners.
• This type of organisation is followed in the army on the same pattern. So, it
is called military organisation. Under type of organisation, the line of
authority flows from the top to bottom vertically. So it is called line
organisation.
6.
7. Characteristics of line organisation
o It consists of direct vertical relationships.
o Authority flows from top-level to level to bottom level.
o Departmental heads are given full freedom to control their
departments.
o Each member knows from whom he would get orders and to
whom he should give his orders. A senior member has direst
command over his subordinates.
o Operation of this system is very easy.
o Existence of direct relationship between
superiors and subordinates.
o The superior takes decisions within the scope of his authority
8. Advantages and Disadvantages of Line Organisation
Advantages Disadvantages
1. Simplicity 1. Lack of specification
2. Division of authority and responsibility 2. Over loading
3. Unity of control 3. Lack of initiative
4. Speedy action 4. Scope for favoritism
5. Discipline 5. Dictatorial
6. Economical 6. Limited/Improper communication
7. Co-ordination 7. Instability
8. Flexibility
9. Effective control and supervision
9. Functional organisation
• Under line organisation, a single person is in charge of all the activities of the
concerned department. The person in charge finds it difficult to supervise all the
activities efficiently.
• The reason is that the person does not have enough capacity and required
training. Under functional organisation, various specialists are for various
functions performed in an organisation.
• These specialists will attend to the work which is common to different functions
of various departments. Workers, under functional organisation, receive
instructions from various specialists.
10.
11. Functional organisation
The need for functional organisation arises out of:
• The complexity of modern and large-scale organisation
• A desire to use the specialization in full and; to avoid the work-load of
line managers with complex problems and decision-making.
• The work is divided according to specified functions.
• Authority is given to a specialist to give orders and instructions in
relation to specific function.
• Functional authority has right and power to give command throughout
the line with reference to his specified area.
12. Characteristics of functional organization
o The decision is taken only after making consultations with the functional
authority relating to his specialized area.
o The executives and supervisors discharge the responsibility of functional
authority.
13. Advantages and Disadvantages of Functional Organisation
Advantages Disadvantages
1. Specialisation 1. Conflict in Authority
2. Increase in efficiency 2. Lack of co-ordination
3. Scope of growth 3. Difficulty in fixing responsibility
4. Flexiblity 4. Delay in Training decisions
5. Relief to top executives 5. Poor discipline
6. Economy of operation 6. Expensive
7. Better supervision 7. Group rivalries
8. Democratic control
14. Line and staff organisation
• The line officers have authority to take decisions and implement them to achieve
the objectives of the organisation.
• The line officers may be assisted by the staff officers while framing the policies
and plans and taking decisions organisation. The authority flows from top level to
the lower level of the organisation through the line officers while the staff officers
attached to the various departments advise the departments.
• The staff officers are not in a position to compel the line officers to follow the
advice by them.
• Each department is headed by a line officer who exercises full authority regarding
the planning.
15.
16. Functions of staff officers
o The staff officers assist the line officers in the planning of business activity.
o The board of directors frames the policies of the business on the basis of
recommendations given by the staff officers.
o The managers can get the advice from the staff officers regarding the selection.
‘training’ placement and remuneration fixation the personnel. The staff officers give
regarding the method of improving the product, the technique of reducing the cost of
production, increasing the profits of the concern.
o The staff officers prescribe the procedures to be followed by the line officers in the
execution of policies and programs.
o Staff officers of a department help the manager in the preparation of budget of the
department.
o the staff officers may be called to solve the administrative problems encountered
by the line officers in general.
17. Arguments of staff officers against line officers
o The staffs give advice without considering the nature of business as a whole.
o Staff officers are very much interested in becoming line officers of the organisation
rather than impairing advice to them.
18. Solution to the conflict between line officers and staff officers
• Both line officers and staff officers should clearly understand the nature of
relationship prevailing between them.
• A separate staff member should be appointed to bring about co-operation
between the line officers and staff officers.
• The line officers should be encouraged to use the advice of staff officers.
• Only qualified persons should be selected and placed as staff officers. The staff
officers should be convinced by the line officers if their advice is not accepted
• The responsibility for results could be fixed on both line officers and staff
officers
• Only experienced persons alone should be promoted as line executives..
• Remove the fear of the line officers and staff officers whether the new ideas of
advice would be properly put into use or not.
19. FUNCTIONS OF STAFF AUTHORITY
1. Agency of control – cost, audit, budget, personnel, accounting
2. Agency of co- ordination- planning, order and distribution, production planning,
3. communication
4. Agency of service- research and development, taxes, statistical analysis
5. Agency of advice- legal advice, public relations, labour relations, economic.
20. Committee organisation
“A Committee as a group of persons either appointed or elected who are
to meet for the purpose of considering matters assigned it”
Types of committee
o Formal and Informal committees
o Advisory committees
o Line committees
21. Formal and Informal committees
If a committee is formed as a part of organisation structure and is delegated some
duties and authority, it is called formal committee.
An informal committee may be formed to tackle some problem.
22. Advisory Committee
These are the committees to advice line heads on certain issues. Line officers may refer some
Problems or issues to a committee for advice.
23. Line Committees
There may be committees with managerial powers.
Instead of giving a work to one person it may be assigned to a number of executives.
The committees having administration powers are called line or plural committees.
24. Functions of a Committee
• Collect the necessary information from different sources and arrange the
information orderly.
• The collected information is critically analyzed.
• Draft a detailed report containing the recommendations for the purpose of
implementation.
• Formulate the standard of performance for the purpose of evolution of
actual performance in future.
26. Top level
• This level consists of an organization’s board of directors and the chief executive or
managing director.
• It is the ultimate source of power and authority, since it oversees the goals, policies, and procedures
of a company.
• Their main priority is on the strategic planning and execution of the overall business success.
The roles and responsibilities of the top level of management can be summarized as follows:
• Laying down the objectives and broad policies of the business enterprise.
• Issuing necessary instructions for the preparation of department-specific budgets, schedules,
procedures, etc.
• Preparing strategic plans and policies for the organization.
• Appointing the executives for middle-level management, i.e. departmental managers.
• Establishing controls of all organizational departments.
• Since it consists of the Board of Directors, the top management level is also responsible for
• communicating with the outside world and is held accountable towards
an organization’s shareholders for the performance of the enterprise.
• Providing overall guidance, direction, and encouraging harmony and collaboration.
27. Executive or Middle Level
• The branch and departmental managers form this middle management level.
• These people are directly accountable to top management for the functioning of their respective
departments, devoting more time to organizational and directional functions.
• For smaller organizations, there is often only one layer of middle management, but larger enterprises
can see senior and junior levels within this middle section.
• The roles and responsibilities of the middle level of management can be summarized as follows:
• Executing the plans of the organization in accordance with the policies and directives laid out by the
top management level.
• Forming plans for the sub-units of the organization that they supervise.
• Participating in the hiring and training processes of lower-level management.
• Interpreting and explaining the policies from top-level management to lower-level management.
• Sending reports and data to top management in a timely and efficient manner.
• Evaluating the performance of junior managers.
• Inspiring lower level managers towards improving their performance.
28. Supervisory, Operative, or Lower Level
• This level of management consists of supervisors, foremen, section officers, superintendents,
and all other executives whose work must do largely with HR oversight and the direction of operative
employees.
The roles and responsibilities of the lower level of management can be summarized as follows:
• Assigning jobs and tasks to various workers.
• Guiding and instructing workers in day-to-day activities.
• Overseeing both the quality and quantity of production.
• Maintaining good relations within lower levels of the organization.
• Acting as mediators by communicating the problems, suggestions, and recommendatory appeals, etc. of
workers to the higher level of management, and in turn elucidating higher-level goals and objectives to workers.
• Helping to address and resolve the grievances of workers.
• Supervising and guiding their subordinates.
• Taking part in the hiring and training processes of their workers.
• Arranging the necessary materials, machines, tools, and resources, etc. necessary for accomplishing
organizational tasks.
• Preparing periodical reports regarding the performance of the workers.
• Upholding discipline, decorum, and harmony within the workplace.
• Improving the enterprise’s image as a whole, due to their direct contact with the workers.
29. Non-managerial employees
Non-managerial employees are employees who do not have any management role
but are responsible for executing or carrying out individual jobs or functions for the
organization.
