Concept of Organization Structure

Organization structure is the outcome of the organizing process. It refers to the way an organization is arranged
in terms of hierarchy, tasks, roles, responsibilities, and communication. It is framework that specifies how tasks
are divided into departments or functional areas, how authority and responsibilities are distributed, how hierarchy
of positions are arranged along with chain of command and reporting relationships, and how communication
flows between different levels of the organization. The structure clearly defines the relationships among its
various components, such as departments, teams, and individuals.

Therefore, organizational structure serves as the mechanism or framework through which people, functions, and
facilities are integrated to achieve predetermined goals. A sound organizational structure is essential for the
effective implementation of plans and strategies. This structure facilitates efficient and effective workflow within
the enterprise. It is often depicted using an organizational chart that resembles a pyramid, with a narrow top and
a broad base.

Forms of Organization Structure

1. Line Organization Structure

The line organization structure is the oldest and simplest form of organizational structure. It is also known
as a scalar or military organization. In this structure, authority flows downward in a direct line from the
top to bottom levels of the organization. Similarly, responsibility flows upward from bottom to top levels.
Under such structure, there is a clear and linear chain of command. All managers have direct authority
and control over their respective subordinates through the chain of command. Each subordinate is
responsible to only one superior.

A line organization structure is typically more centralized. All major decisions are made by higher-level
managers and handed down to the subordinate levels for implementation.

Features of Line Organization Structure

• There is direct line of authority (scalar chain) from top to bottom.

• Each superior is independent, has complete control over his subordinates and takes decisions in
his own area of work.
• Order and instructions flow from a superior directly to his subordinates.
• Each subordinate is directly responsible to his superior for work performance.
• Every individual is responsible to one superior only i.e., unity of command is maintained in the
organization.
• Authority is highest at the top and reduces at each successive level down the hierarchy.

Please copy the specimen figure of the Line Organization Structure from the textbook.

Advantages/Merits of Line Organization

1. Simple: - It is the simplest type of organization and can be easily understood by all employees. Clear
authority, responsibility, relationships, chain of command, and direct supervision make it simple.
Everyone knows who his/her superior is, from whom to take orders, and to whom they must report.
It is easy to understand and implement.
2. Fixation of Authority and Responsibility: - The authority and responsibility of each person are
clearly defined in a line organization. Everyone knows his/her duties, authority, and responsibilities.
 Each employee is accountable for the tasks assigned to them, and no one can shift or evade their
responsibilities onto others.
3. Quick Decision-making: - In a line organization, decision-making is centralized, with the top-level
manager responsible for making strategic decisions. However, each departmental manager has an
independent status and can make decisions for their respective department or division without needing
to consult multiple individuals. There are no staff personnel for consultation either, which enables
managers to make prompt decisions.
4. Maintains Discipline: - In a line organization, a clear chain of command extends from top
management to subordinate levels. Each individual has authority over those working under him, and
every individual is responsible to his immediate superior. This direct link between superiors and
subordinates enables better control and constant supervision. This helps to maintain discipline in the
workplace.
5. Flexible: - Line organizational structure is flexible in nature. The adjustments can be easily made in
this type of structure according to the changing business situations. Depending upon needs and
situations, different departments can be added to the existing organizational structure.
6. Economical: - Line organization is less expensive. There are no staff personnel to advice line officers.
Line officers take their own decisions without looking to specialized personnel. This greatly reduces
the establishment cost.

Disadvantages/Demerits of Line Organization

1. Autocratic Leadership: - In a line organization, authority is highly concentrated at the top

management level. Consequently, top management is likely to lead the organization in an autocratic
or dictatorial manner. The possibility of favoritism and nepotism is also very high in this type of
organization. As a result, weak morale and motivation among subordinates may result.
2. Overload on Managers: - Managers in line organization are overloaded with work as they have to be
involved in various jobs of different nature. As a result, efficiency may reduce due to extreme pressure
in work. They may not have sufficient time to devote in creative functions. It ultimately affects
productivity of the managers.
3. Lack of Specialization: - There is no functional specialization in line organization. As one person
looks over all the work relating to his department it, there is no scope for specialization. One person
cannot be expert in all area.
4. Problem of Coordination: - In line organization, various departments operate autonomously. They
perform their functions independently in their own ways. There is little communication or
collaboration between different departments. As a result, top-level management may encounter
challenges in maintaining coordination among the functions of various departments.
5. Inefficiency: -In line organization, there is no provision of experts or specialists for providing advice
or suggestions. In the absence of expert’s advice, decisions may be imbalanced, resulting in
inefficiency and loss.
6. One Way Communication: - Generally, there is one way communication from top to bottom. The
workers have to follow the orders and instructions of the superior. There is no provision of upward
communication from the lower-level. This affects subordinates’ creativity and capacity for
independent thinking.

2. Line and Staff Organization Structure

Line and staff organization structure is the combination of both line structure and functional organization
structure. This structure has been developed to strike a balance between the unity of command and
functional specialization. Under this structure, there is the provision of a chain of command as in a line
organization. Additionally, there is also the provision of staff specialists/experts to provide advice or
suggestions to line managers in taking important decisions. Thus, this structure combines staff specialists
with the line managers.

Under this system, the work of the organization is broadly divided into line functions and staff functions.
Therefore, there are two sets of officers - line officers and staff officers/specialists.

• Line Officers: Line officers have authority and command over the subordinates and are
accountable for the tasks entrusted to them. They are responsible for accomplishing organizational
objectives.
• Staff Officers: The staff officers are specialists who offer expert advice to the line officers to
perform their tasks efficiently. The staff officers carry out research, planning, and provide advice
to the line officers, and the line officers execute the plan with the help of workers. Thus, the line
and staff organization structure is based on the principle of specialization.

Advantages/Merits of Line and Staff Organization

1. Specialization: - It is based on specialization. The line managers get the benefit of specialized
knowledge of staff specialists at various level. Thus, this structure provides benefit of specialization
and efficiency.
2. Practical and Balanced Decision: - The line managers get expert advice from staff specialists when
taking important decisions. With the help of information and advice from staff members, the line
officers can take balanced and practical decisions.
3. Less Burden on Line Officers: - The total work load of the enterprise is divided into line and staff
authorities. Staff thinks and line acts. The staff specialists undertake the research and detail analysis
of each managerial activity and provide input to line managers in decision-making according to their
lines of specialization. This reduces workload of line managers.
4. Better Discipline: - The unity of command is maintained in this type of organization. The staff
personnel do not interfere with the executive work of line officers. The workers get command from
line personnel and are accountable directly to them for their performance. This creates better
understanding and discipline among employees.
5. Better co-ordination: - In a line and staff organization, both line and staff authorities focus on their
own areas of responsibility. Line authorities concentrate on implementing plans and carrying out their
respective activities, while staff authorities focus on providing advice to line authorities. This approach
helps maintain better coordination among members of the organization.
6. Flexibility: - In line and staff structure, new line departments can be created on the basis of
requirements. Similarly, staff specialists can be added to the line as and when needed without
disturbing the line structure. Hence, there is a greater flexibility in the organization.

Disadvantages/Demerits of Line and Staff Organization

1. Confusion: -If the authorities and responsibilities of line and staff members are not clearly indicated,
it may create confusion throughout the organization. It may in turn, lead to the problem of
communication, coordination and control.
2. Problem of Conflict: - There is a possibility of conflict between line and staff personnel. The
responsibility for carrying out actual operations of the organization lies with line officers, while staff
officers only advise. The staff officers may feel ignored at the hands of line officers. They may feel
that line mangers are not receptive to their input. The line officers, on the other hand, complain of
interference by staff persons in the day-to-day working. The conflict between line and staff officials
adversely affects the work in the organization.
3. Costly: - In line and staff organization, two types of personnels such as line personnel and staff
personnel are appointed. The salary and other benefits to staff experts will increase the cost of the
organization. Thus, Small and medium concerns cannot afford line and staff organization because of
its expensive nature.
4. Over-dependence: - Line executives may depend too much on staff experts for information and
advice. They may refer everything to staff experts for advice. As a result, line managers may lose their
own initiative power, imagination and judgment power.
5. Lack of Responsibility: - Lack of Responsibility: Staff specialists are not held accountable for the
implementation of plans and the results of operations; their role is limited to providing ideas and
suggestions. Accountability for non-performance rests with the line members. Consequently, due to
the lack of clear accountability, staff officials may become careless in fulfilling their responsibility.
1. Ineffective Staff: - The staff experts’ role is limited to providing ideas and suggestions to line
authorities. Whether or not to accept their suggestions depends upon line authorities. They do not have
a power to compel line authorities to implement their suggestions and ideas. Without power, they may
feel unimportant, and consequently become careless in their responsibilities. As a result, there
presence may become ineffective.