A worker reports to a manager. A manager reports to a director, a director reports come a vice president, and also a vice president reports to a C-level senior leader, like a chief executive officer or a chief bureaucratic officer. If you’ve ever worked in a corporate setting, you’re likely to recognize this together the basic collection of class of an organization structure.

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Organizational structure defines how job work are formally divided, grouped, and coordinated. The structure of an organization usually functions six different elements:

Work specializationDepartmentalizationChain of commandSpan the controlCentralization and decentralizationFormalization

Practice Question

Now that us understand just what business structure is, let’s take a look in ~ each one of its elements, so we can much better understand just how organizations pick to framework themselves to maximize productivity.

Work Specialization

Earlier, us studied Frederick Winslow Taylor, who researched time and also motion and determined the most efficient ways for employees to do their tasks. Taylor’s “one right way” to be the bear of job-related specialization. As soon as Henry Ford conceived the assembly line, the tossed aside “one finest way” and also viewed work specialization v an eye toward ongoing improvement. Work specialization defines the degree to which activities in the organization are divided, and also then subdivided, into separate jobs.

If you placed one worker on the job of structure an automobile, he might still be structure it a month or two later. Yet if you have one worker that’s focused on installing best front tires, and another that is concentrated on left former fenders, climate those tasks become standardized. Employees learn to execute them conveniently with practice.

By the 1940s, most manufacturers were practicing job-related specialization, or “division of labor” together it’s occasionally called. Job-related specialization was right from a task suggest of view—easy tasks could be excellent by unskilled labor, and those jobs that required more skill can be be separate out and also addressed by employees that possessed those skills. Those professional employees no wasting their time on work they didn’t need to be doing.

Work specialization was additionally ideal from a productivity point of view. Surroundings of brake pads requires different tools 보다 the installation of a tire, and when employees were assigned to one of those tasks instead of both, devices didn’t need to be take away out and also put away. Employees could cheaply it is in trained to perform one certain task, and many employees, each trained to perform their particular task, could assemble highly complex machinery quicker and easier 보다 one extremely trained employee the possessed every the an abilities to finish the assembly.

Manufacturers ongoing to tinker with and fine-tune worker expertise to increase productivity till the 1960s, when it became clear that a great thing can be taken as well far. Boredom, stress, low productivity, boosted absenteeism and turnover offset higher productivity. Manufacturers responded by enlarging worker specialization, including more tasks in ~ a place to increase engagement.


Once work are separated up through work-related specialization, those work need to be merged together to coordinate typical tasks. Departmentalization is the basis whereby jobs space grouped together. Jobs deserve to be grouped in the adhering to ways.

Function. This is amongst the most popular method to team activities. Corporations could have a it is provided chain function, a finance function, a human being resources function. Every the worker specializations because that those locations are group together, and people with common an abilities work in typical units.Product. A huge manufacturing company might team its usual tasks with each other by product. A paper products manufacturer can have a department because that office paper, and other department because that bathroom tissues, and yet an additional for cartons. The major advantage the organizing usual tasks this means is to rise employee accountability for the success of those products.Geography. If an organization customers are scattered over a geographic region, an company might pick to group usual tasks geographically. A agency that has actually a South, Midwest, and also Eastern sales duty is organizing around territory, or geography.Process. A manufacturing plant might pick to organize common tasks around process. A tubing plant might organize departments around casting, pressing, finishing, packaging, etc. Each department specialization in one particular part of the manufacturing process. The exact same kind the departmentalization is true that the department of engine Vehicles, where you continue from one area to another to renew your patent plates or your driver’s license.Customer. A business might choose to combine tasks about the kind of client it serves. Because that instance, a company like Dropbox.com has free record sharing and also cloud storage for its separation, personal, instance users, but there is also a department of Dropbox that services business clients.

Large corporations have the right to use any type of or every one of these types of departmentalization to organize themselves. They could have a manufacturing area the organizes itself about process, however then a sales department that is organized geographically and also a that company support center that’s organized functionally.

Chain that Command

The chain that command is the unbroken heat of authority that extends indigenous the top of the organization (e.g., the CEO or the President) come the lowest echelon and also clarifies who reports come whom. In ~ the beginning we talked about managers report to directors, that reported to vice presidents that reported to C-level leaders. Together is the chain that command.

Two extr concepts go along with the idea the chain that command. The first, authority, describes the rights inherent in a managerial place to offer orders and also to suppose the order to be obeyed. The second, unity of command, explains the ide that a subordinate have to only have actually one premium to who he or she is straight responsible. If unified of command no exist, yes sir a likelihood the a subordinate will be responding to commands from different people and experiencing a dilemma of completing priorities, which isn’t productive.

We learned around Henri Fayol and also his theories roughly management, specifically chain of command and also unity of command. These values used to be a cornerstone of business structure, but breakthroughs in technology and the trend towards empowering employees provides this much less relevant today, however the chain the command facet is not going to disappear any type of time soon.

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Span that Control

Span of manage deals v the number of subordinates a manager can effectively direct. The broader an organization deserve to make that managers’ spans of regulate the much more efficient it will be. More comprehensive spans of control save money.