TYPES OF ORGANIZATION

A topical report presented by ERNA MARIE D. QUIRANTE as partial fulfillment of the course
MAED 514- Organization of Educational Leadership and Management with policy
Formulation and Analysis on Financial Technology, 1st semester 2022-2023 under Dr.
Hanudin M. Pahm, Professor Graduate College Cotabato Foundation College of Science and
Technology, Doruloman Arakan, Cotabato.

TYPES OF ORGANIZATION

Organization is made up of one or more people that serve a particular purpose, like a business
or an association. The word comes from the Greek word organ, which also means musical
instrument and organ. A group of people who collaborate, such as in a union, corporation, charity,
or neighborhood association, constitutes an organization. Forming or establishing something is
another definition of organization.

A system that specifies how specific activities are to be carried out in order to accomplish an
organization's objectives is known as an organizational structure. These activities may include
guidelines, job descriptions, and accountability. How information moves between company levels is
also governed by the organizational structure. For instance, in a centralized structure, decisions are
made from the top down, whereas in a decentralized structure, decision-making authority is shared
among different organizational levels. An organizational structure, which describes how specific
activities are directed to achieve an organization's goals, enables businesses to remain effective
and focused. Successful organizational structures define each employee's role and how it fits into
the larger system. In contrast to decentralized structures, which give nearly every employee a high
level of personal agency, centralized structures have a clearly defined chain of command.
(https://www.investopedia.com/terms/o/organizational-structure.)

TYPES OF ORGANIZATION

1. Line Organization

Line organization is the most basic structure. A vertical relationship flow is approximated by a line
organization. In a line organization, power is distributed evenly from top to bottom. Additionally
called the scalar principle or the chain of command. The earliest and most fundamental type of
organizational structure is the line structure. A supervisor has direct supervision over a subordinate
in these organizations. Additionally, power is transferred from the person at the top of the
organizational hierarchy to the person at the bottom. Military organizations and scalar-type
organizations are other names for this type of organization.

(https://www.toppr.com/guides/business-management-and-entrepreneurship/organizing/formal-
organization-line-organization/)
Types of Line Organization

a. Pure line organization

In the "Pure Line Organization," each man performs the same type of work (at any level of
management), and the divisions primarily serve as a means of control and direction. In reality, it is
uncommon to find this kind of organization.
Every employee in this type of organization does the same kind of work. Only for the convenience
of management and supervision, departments are divided.

b. Departmental line organization

An organization is divided into a number of departments, each of which is led by a different

departmental head, under this type of organizational structure. The general manager has the final
say in how each department runs. Direct orders from the general manager are sent to each
department head, who then relays them to the appropriate subordinates.

(https://www.yourarticlelibrary.com/organization/forms-of-organisational-structure-line-functional-
and-line-and-staff-organisation)

Advantages of a Line Organization

Simple to operate both affordable and efficient. Additionally, it enables prompt judgment and
effective coordination. Complies with the scalar organizing principle. Furthermore, it encourages
command unity. In a line organization, specific individuals are assigned the duty of carrying out
tasks. As a result, accountability for completed tasks exists.Due to unifying control and unwavering
loyalty, line organizations exhibit excellent discipline. Due to staff members' lack of involvement, the
organization's overall operating costs are low. It is a reliable type of structure.

Disadvantage o a Line Organization

Lack of specialization can be detrimental to a line organization. This is due to the fact that each
department manager is only interested in the operations of his particular department. Employees
are therefore proficient in tasks specific to their departments. These organizations have the capacity
to push one or a few key personnel to the limit. In the absence of a staff support, a strong man can
also take control of the organization and run it however he pleases. Such arbitrary power has the
potential to cause the organization serious harm.

(https://www.marketing91.com/functional-organization/)

2. Staff Organization

Tasks carried out by staff groups support line group activities. They are made up of legal advisory,
human resources service, or accounting control groups. Employee support groups assist those
working on the company's main productive project. The foundation of the organization is therefore
built by staff groups.

(https://www.britannica.com/topic/line-staff-management)

Types Of Staff
a. Personal Personnel

This also refers to the line officers' personal staff. For instance, a manager's secretary, personal
assistant to the general manager, etc. The line officers receive helpful guidance and support from
the personal staff.

b. Specialized Employees

This group includes a variety of experts with specialized knowledge in a variety of fields, including
marketing, law, accounting, and human resources. They provide the organization with specialized
services.
For instance, a business might hire a lawyer to provide legal counsel on various legal issues. For
solving accounting issues, it might employ a chartered accountant and a cost accountant.

c. General Staff

This group consists of various subject-matter experts who offer insightful counsel to the top
management on a variety of issues that call for expert opinion.

(https://www.google.com/search?q=staff+organization)

3. Line and Staff Organization

In a centralized structure, managers make decisions, which are then communicated downward
through the organization. However, as an organization expands in size and complexity rises, they
must be adaptable with the centrally applied control. In an effort to preserve a unified leadership
structure, the line-staff organization principle introduces this flexibility into hierarchical lines of
authority. The technical foundation of the company is the focus of the work being done by line
groups. They are involved in carrying out the enterprise's main goal. Regarding the technical
organizational purposes, line groups have the final say in the matter.

(https://study.com/academy/lesson/line-structure-overview-examples.html)
Advantage of a Line Organization

Line organizations have very basic organizational structures and do not practice specialization at

work. Functional organization, on the other hand, is more difficult because the relationship between

authorities is not clearly defined. However, line and staff organization embraces the advantages
and gets around the shortcomings of line and functional structures. It is therefore the type of

organizational structure that is most appropriate. In a line-and-staff organization, line authority

focuses on task execution with the aid of functional specialists while staff authority is concerned

with planning functions. As a result, it encourages specialization, which boosts productivity and

efficiency.

Disadvantage of a Line Organization

Lack of specialization can be detrimental to a line organization. This is due to the fact that each

department manager is only interested in the operations of his particular department. Employees

are therefore proficient in tasks specific to their departments. These organizations have the capacity

to push one or a few key personnel to the limit. In the absence of a staff support, a strong man can

also take control of the organization and run it however he pleases. Such arbitrary power has the

potential to cause the organization serious harm.

(https://benefits-drawbacks.blogspot.com/2021/07/advantages-disadvantages-line-and-staff-
organization.)
Functions of Line and Staff Authority

a. Agency of Control

It must carry out duties in the areas of organization, cost, audit, budget, human resources, and
accounting.

b. Agency of Co-Ordination

It must assist in coordinating the efforts of various departments, including planning, order, and
distribution.

c. Agency of Service

It performs functions like Research and development, axes ,Statistical analysis

and Personnel development.

d. Agency of Advice

Functions like providing legal counsel, managing public relations, managing labor relations, and
conducting economic.
(https://www.yourarticlelibrary.com/organization/line-and-staff/line-and-staff-organisation-types-
functions-advantages-and-conflicts)

4. Functional Organization

The concept "Functional Organization" was created by F.W. Taylor, better known as the father of

scientific management. Functional organization implies that the organization should be based on

various functions, as the name already suggests. Taylor's functional approach, which seeks to

achieve organizational balance, is primarily founded on the principle of specialization. The principle

of specialization embodies the idea that by dividing the manual from the mental requirements, both

employees and managers can achieve a higher level of proficiency. Taylor advocated for

functionalization even at the shop level, where employees must produce goods. He believed it was

best to avoid the common practice of assigning one foreman to oversee 40 to 50 workers.

The 8 types of specialist foremen

1. Route clerk

He specifies the precise path or route that raw materials must take in order to become finished
goods.

2. The card clerk's instruction

To be followed in carrying out the task in accordance with the route established by the route clerk,
he prepares comprehensive instructions.

3. A time and expense clerk

He calculates the total time needed to complete a product as well as the cost of production overall
and per unit. To effectively manage the time and costs involved in producing goods, he creates a
variety of work schedules and cost sheets.

4. Shop disciplinary officer

He is in charge of preserving orderly discipline within the company. In actuality, he is the factory's
keeper of order. "The shop disciplinarian is responsible for discipline and good order, fie is also the
peacemaker and assists in adjusting wages," according to Kimball and Kimball Jr.
He is useful in settling small disagreements about pay, holidays, working conditions, and hours of
work, among other things.

5. Gang leader
He ensures that workers have access to the various tools and machines they need to do their jobs.
Various production designs, drawings, raw materials, etc. are also provided by him.

6. The speed boss

He regulates the speed of various machines used by the organization. He occasionally shows the
workers the appropriate speed at which the machines should run. He exercises proper machine
speed supervision.

7. Repair manager

He is interested in the proper upkeep and repairs of machinery to keep them in good working
condition. In Spriegel's words, "His job of maintenance includes cleaning the machine, keeping it
free from rust and scratches, oiling it properly and maintaining the standards which have been set
up for the auxiliary equipment connected with the machine such as belts, counter shafts and
clutches." His main task is to carry out prompt repair of the defective machines so that the work
may not be hampered.

8. Inspector

He examines the work's quality and certifies that it meets pre-established standards. The inspector
verifies that the standards have been met. He fosters among the employees a sense of quality
consciousness. An inspector needs to be knowledgeable about the technical aspects of quality
control in order to do his job well.

(https://www.yourarticlelibrary.com/organization/forms-of-organisational-structure-line-functional-
and-line-and-staff-organisation/25679)

Advantages of functional organization

a. The department's highly effective linear structure aids in providing each employee with clear

instructions. It also gets simpler to carry out the aforementioned instructions.

b. Employees have a high level of skill, and since they are experts in a particular field of work, it is

simple for them to perform above expectations because their entire attention is directed toward that

one objective.

c. Based on their shared knowledge and abilities, all the individuals or employees are grouped. It

produces the best performance possible.

d, Every employee's and every department's accountability for their work is clearly defined, which

produces accurate results. Everyone understands their place in the chain of command and when to

defer to higher-ups, as it is very explicit and clear which decisions belong to them.
The disadvantages of the functional organization

When two or more people with nearly identical skills are working together, conflicts may occur if one
employee receives promotion while the others do not.
The departments grow in size as the business expands. Due to the number of people employed
there, each of them grows into a small business unto itself. Mismanagement and conflict may result
from this.

5. Committee Organization

A committee organization is a group of individuals formed to find solutions to problems that are

frequently encountered. The line employees are given the chance to talk about their issues in the

committee. The organizational structure of the committee is more like staff organization than line or

functional organization. Its decisions are carried out, as opposed to staff decisions, which may or

may not be. A formal component of the organizational structure, it specifically refers to the

members.

For instance, all functional managers will be represented on the Finance Committee. The Managing

Director serves as Chairman, with members including the Marketing Manager, Production Manager,

Personnel Managers, etc. It will choose what each department's budget needs to be. Since the

committees are composed of representatives from various functional departments, the decisions

made by them are carried out by the line staff.

https://bizfluent.com/info-8584290-differences-between-line-staff-functions.html

The following types committee

a. Formal and Informal Committees

A committee is considered formal if it is established as a part of the organizational structure and

given certain responsibilities and power. To address an issue, a loosely organized committee might
be created. A manager might ask some specialists to assist him in problem analysis and solution
recommendation. To find a solution to a problem, the chief executive may call a meeting of
department heads and some experts. It is a case of an informal committee in both instances.

b. Advisory Committees

These groups serve as the line-head advisory committees. Line officers may ask a committee for
advice on certain issues or problems. The committee will gather data regarding the issue and make
recommendations for solutions. The recommendations from advisory committees may be accepted,
modified, or rejected by the line officers. These committees lack managerial authority and are
unable to influence the line executives with their opinions.

c. Line Committees

There might be committees with executive authority. A task might be divided up among several
executives rather than being assigned to one person. Line or plural committees are the names
given to the committees with administrative authority. Line committees aid in the organization of
efforts to carry out company policies and programs, etc. These committees also oversee and direct
employee activities in order to accomplish organizational objectives.

(https://www.yourarticlelibrary.com/organization/committees/committees-meaning-need-types-
advantages-and-weakness/63780)

Advantages of committee organization

The structure of a line organization is very basic, and specialization in the workplace is not
practiced there. However, because the relationship between authorities is not clearly defined,
functional organization is more difficult. However, line and staff organization accepts the
advantages and outperforms line and functional structure shortcomings. As a result, it is the best
type of organizational structure. In a line-and-staff organization, staff authority is focused on the
function of planning, while line authority is concerned with carrying out tasks with the aid of
functional specialists. So it encourages specialization, which aids in boosting productivity and
efficiency.

Disadvantages of committee organization

The committee's structure itself is a time and resource-intensive undertaking. The committee's
structure ensures that everyone has an equal opportunity to participate in discussions and to voice
their opinions, which can take a lot of time. Sometimes, winning an argument or getting even with
someone personally can make the issue seem less important, weakening the decision.

(https://www.managementstudyhq.com/advantages-and-disadvantages-of-committees
To sum up, the line structure is the oldest and most fundamental kind of organizational structure.
Other names for this kind of organization include scalar-type organizations and military
organizations. Employee assistance programs offer support to those engaged in the company's
primary productive project. Staff groups are therefore responsible for laying the foundation for the
organization. Functional organization is the most common type of organizational structure.
Depending on the company's distinct functional areas, such as IT, finance, or marketing, smaller
groups are formed within the organization. With so many departments, this type of structure might
also have a variety of reporting structures. A committee organization is a collection of people
assembled to address issues that come up frequently. The committee's organizational structure is
more similar to that of a staff than it is line- or functional-based.