The basic tool for any establishment is the Organization chart Shows the structure of an organization in terms of how the various units or departments are linked together Organization structure is the outcome of putting people and jobs together and represents the entire team involved in the running of the establishment at both operational and management levels. Organization chart
Tells us about the subordinate – superior relationships and lines of decision making authority (who reports to whom)
It also establishes the existence of unitary or dual command
Shows the well set structure of the organization; to achieve maximum efficiency – proper communication and proper coordination.
Indicates functional units (formal authority relationships and informal relationships)
Organization Structure can be In Two Directions:
Vertical ….. person above assigns work to his immediate subordinate (line authority relationship)
Horizontal …… this is an extended version which arises when the length of the structure increases and coordination of activities of the establishment becomes difficult (line & staff) so the duties get divided separately for each unit. This results in a horizontally spread structure.
Vertical and horizontal organization structure
An organizational chart thus indicates functional units as well. The functions and positions are represented graphically by blocks. The solid lines indicate formal authority and relationships while dotted ones represent informal relationship.
Organization structure may also indicate whether the authority is centralized and decentralized. The flat or tall structures indicate the span of control at each level of the establishment. Tall structures have shorter span of control.
Limitations:
Chart may show only formal authority relationships and omit many informal ones which may develop spontaneously between people at work,
May not show how much authority is vested in each position
May not be a realistic one
Does not indicate the nature of management activity
People begin to interpret authority relationships as difference in status.
Participants