Organisation structure and design
Organisation structure fixes who reports to whom and who decides. Design choices cover departmentation, authority, centralisation versus decentralisation and span of control.
Types of organisation structure
| Structure | Key feature | Strength | Weakness |
|---|---|---|---|
| Line (military) | Authority flows straight down; each person has one boss | Simple, quick decisions, clear discipline | Overloads the top; no specialists |
| Line and staff | Line managers command; staff experts advise | Specialist advice with unity of command | Line-staff conflict |
| Functional | Grouped by function: production, marketing, finance, HR | Specialisation and economies of scale | Silos; slow cross-functional coordination |
| Divisional | Grouped by product, region or customer; each division has its own functions | Clear accountability for results | Duplication of resources |
| Matrix | Functional and project lines overlap; two bosses | Flexible use of experts on projects | Dual authority breaks unity of command |
| Team, network and boundaryless | Cross-functional teams, outsourced partners, few internal walls | Speed and adaptability | Weaker control; unclear roles |
Authority, responsibility and accountability
Delegation runs in three steps: assign duties, grant authority, create accountability.
Centralisation versus decentralisation
Delegation is one superior passing authority to one subordinate; decentralisation is delegation applied as a policy across the whole organisation.
Span of control
| Aspect | Narrow span | Wide span |
|---|---|---|
| Subordinates per manager | Few | Many |
| Shape of structure | Tall, many levels | Flat, few levels |
| Supervision | Close | General, with more delegation |
| Communication | Slower, more distortion | Faster, fewer layers |
| Suits | Complex, varied or new work; less trained staff | Routine, similar work; skilled, self-reliant staff |
Worked example: Graicunas' relationships
A manager has 4 subordinates. How many relationships must she manage, according to Graicunas?
- Direct single relationships = n = 4.
- Direct group relationships = n(2^(n−1) − 1) = 4 × (8 − 1) = 28.
- Cross relationships = n(n − 1) = 4 × 3 = 12.
- Total = 4 + 28 + 12 = 44.
- Check with the formula: n(2^(n−1) + n − 1) = 4 × (8 + 4 − 1) = 4 × 11 = 44.
44 relationships. A fifth subordinate raises the total to 5 × (16 + 5 − 1) = 100.
Mintzberg's five configurations (1979)
| Configuration | Key part | Coordinating mechanism |
|---|---|---|
| Simple structure | Strategic apex | Direct supervision |
| Machine bureaucracy | Technostructure | Standardisation of work processes |
| Professional bureaucracy | Operating core | Standardisation of skills |
| Divisionalised form | Middle line | Standardisation of outputs |
| Adhocracy | Support staff | Mutual adjustment |
What shapes design
- Strategy: Chandler (1962) found that structure follows strategy.
- Environment: Burns and Stalker (1961) found mechanistic structures suit stable settings and organic ones suit dynamic settings.
- Technology: Joan Woodward linked structure to unit, mass and process production.
- Size and age: larger, older firms become more formal and specialised.
NET asks you to match structure types with features, apply Graicunas' formula, tell delegation from decentralisation and authority from responsibility, and link Chandler, Burns-Stalker and Mintzberg to their ideas.
Typical MCQ: “A manager has 3 subordinates. How many relationships does Graicunas' formula give?” 3 × (4 + 3 − 1) = 3 × 6 = 18. Trap: the count is not linear; with 4 subordinates it jumps to 44, not 24.
Typical MCQ: “A consumer-goods company runs its soaps, foods and beverages businesses as separate units, each with its own marketing and production. Which structure is this?” Divisional (product) structure. Trap: it is not a matrix, because each employee still has one boss.
Delegate authority, keep responsibility, demand accountability. Narrow span = tall; wide span = flat. Graicunas: 4 → 44, 5 → 100.