Different Types of Organizational Structure is the result of the organizing process. As a structure, an organization is a network of internal authority, responsibility relationships. Organizational structure refers to the hierarchical arrangement of various positions in an enterprise. It also define the relationship between various positions departments and persons. Organizational structure constitutes a formal structure with definite authority and clear responsibility. It has to be first designed for determining the channel of communication and flow of authority and responsibility. A hierarchy of positions has to be built up with clearly defined authority and responsibility.
Features of a Good Organization Structure
A sound organization structure meets the various needs of the enterprise. The following are the features of a good organization structure
- A clear line of authority
- Adequate delegation of authority
- Less managerial levels
- The proper span of control
- Simple and flexible
Types of Organizational Structures
Organizational structure differs from enterprise to enterprise. It differs from one another in the way responsibility-author Ä± interaction relationships are established among jobs, personnel a physical factors. Considering the internal and external environment, the enterprise selects the proper organizational structure. Every enterprise has to evolve its own organization structure because it differs in the nature of activities of the, competence of personnel, and the philosophy of business management. Hence, it is no surprise to find a variety of organizational structures. The adoption of a particular type/form of the organizational structure largely depends upon the nature, scale, and size of the business. The three important types or forms of organization structure are
- Line Organization
- Line and Staff Organization and
- Functional Organization
1. Line Organization
It is the simplest and oldest type of organization. It is also known as a military organization because it is developed in the army Line organization is characterized by direct lines of authority flowing from top to the bottom levels of the organizational hierarchy and lines of responsibility flowing in an opposite but equally direct manner. It creates superior-subordinate relationships from top to bottom communication and accountability. It also provides the channels of inline organization each superior is independent and takes decisions in his own area of work. Each subordinate is directly responsible to his superior for work performance. Every individual is responsible for one executive only
Types of Line Organization
Line organization may be of two types:
(i) Pure line Organization
In a pure line organization, the activities at any one level are the same and all the individuals perform the same type of work. They are divided into groups only to enable effective control and supervision.
(ii) Departmental line organization
In a departmental line organization, the firm is broadly divided into departments. Each department is under the control of a departmental manager who is responsible for the superior over him on departmental head can directly issue orders and instructions to subordinates in another department. All communications must flow through the proper channel._
Advantages of Line Organization
It is the simplest type of organization, which can be defined easily and understood by all personnel easily.
2) Fixed Authority and Responsibility:
The lines of authority and responsibility are clear and definite. Member organization find no difficulty in determining to whom they have to report and who is responsible to them.
3)Â Prompt Decisions:
As every manager has complete and control over his subordinates, decisions can be made promptly. He can take decisions freely without consulting any committee or staff specialist.
4) Unified Control and Discipline:
There is unity of command and control according to which an employee can receive orders only from one superior. It means a subordinate is responsible to only one superior. It ensures strong discipline and unity among the employees. It is also easier to control subordinates. It also becomes easier to control subordinates.
When all activities relating to one department are managed by one individual, there is a possibility for effective coordination.
This type of organization is flexible. The adjustments in the organization can be easily made to suit the changing conditions.
7) Less Expensive:
It is less expensive form of organization. Since, it does not employ the staff specialists. it is less expensive from the point of overhead costs.
Disadvantages of Line Organization
There is too much concentration of authority at the top. Hence, there is a danger that one man may rule arbitrarily or even on dictatorial basis.
2) Lack of Specialization:
There is no functional specialization in Line organization. As one person look after all the work relating to his department, there is no scope for specialization. One person cannot be expert in all areas.
In line organization expected to perform too many jobs of diverse nature. Hence. they are overloaded with work and may not be in position to direct and control subordinates properly.
4) Scope for Favoritism:
In line organization, only one executive controls all the activities relating to his department. The appointment, transfer, and promotion of employees also depend upon one person. Hence, there is much scope for favoritism and nepotism.
In line organization experts are not appointed for providing suggestions. n the absence of expert staff's advice, executive decisions may be unbalanced. Hence, it may result in inefficiency and loss.
6) Problem of Replacement:
When the executive leaves or dies, it may create the problem of replacement as there is no provision for training or developing persons who may later replace him.
7) One Way Communication:
In this type of organization there is no communication from subordinates to superiors and the workers should follow the orders of superiors even if they had made the wrong decision. This affects subordinate's creativity and capacity for independent thinking.
2. Line and Staff Organization
As organizations grew. it was felt that in a large organization. a few executives could not perform all the functions themselves. They needed assistance from specialists in various areas. Thus. the line and staff organization was developed. When the provision of 'staff is made in the line organization that becomes line and staff organization. In a line and staff, organization staff plays the role of advisory to the line managers. It was designed to maintain a proper balance between centralization and division of work. In a line and staff organization, the works of an organization are divided into two broad divisions: the staff, which is responsible for planning, and the line for the actual execution of the work. Under this type of organization, there is a direct line authority as in line organization and specialists are attached to the line managers to advise them on important matters. Staff relationship is purely advisory. Staff experts simply provide information and suggestions, which are not binding online managers. who have the ultimate authority to make decisions. Often, in practice, there is no clear-cut distinction in the line and staff authority. The same person may hold both. The staff departments within themselves are also organized on a line basis For instance personnel department is a staff organization, If considered from the point of overall firm, but a personnel manager would have line authority over the staff working under him.
Advantages of Line and Staff Organization:
It is based on planned specialization The expert advice of specialists is made available to line executives at all strategic points. This enables higher efficiency in management.
(2) Sound Decision:
It provides opportunities for sound managerial decisions with the help of information and advice from the staff experts.
(3) Reduces Work Load:
The staff officers provide expert suggestions after a detailed analysis of each important managerial activity. This reduces the workload of line officers which is a big relief to the managers.
(4) Discipline and Stability:
The staff does not disturb the scalar chain and unity of command is maintained. As a result discipline and stability can be maintained in the organization.
(5) Opportunities for Advancement:
A great variety of responsible jobs are available in the line and staff organization Hence, it provides more opportunities for advancement of capable personnel.
In line and staff organization, staff can be added to the line without disturbing the line procedure. Hence. there is greater flexibility in the organization.
Disadvantages of Line and Staff Organization:
- Sound decision
- Reduces workload
- Encourage carelessness
- Discipline and stability Opportunities for advancement
- Reduces initiative power
If the relationship between line and staff is not clearly indicated, there may be considerable confusion throughout the organization. It may create problem coordination, communication, and control in the organization.
Conflicts between line executives and staff experts are very common. Line managers may ignore staff advice it impractical and regard as interference. Whereas over-enthusiastic staff may encroach upon line authority to get its suggestions implemented. Hence, a lack of mutual understanding and mistrust line-staff conflict exists.
Line and staff organization is expensive to use two separate types of executive line and staff have to be employed at high salaries.
4) Encourages Carelessness:
As the staff officer is not concerned with the execution of the plan, he may not take proper precautions before he advises the line officer. Being a specialist in a specific area he cannot see the whole picture objectively. Hence, it may encourage carelessness on the part of the staff officer.
5) Reduces Initiative Power:
Line executives may depend too much on staff experts for ideas and information. As a result, they may lose their own initiative and judgment.