The Nature and Types

of Organization
Structures
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 Organization – is a group of
people who work together for a
common good.
Organization Structure – is a framework where
management authority is
defined, resources are properly allocated, and channel
of communication is
observed.
The Types of
Organization
Structures
Line Organization
The line organization is the simplest and oldest form of organization
structure where authority is delegated directly from top to bottom. Both
staff and line functions are performed by line executive. Each exercises
line authority over his own subordinates. It is for these reasons that a
small size business uses this structure in their organization. Below is the
structure of a line organization.
Line Organization
Line Organization ADVANTAGES
• It is simple. It shows the direct lines
of responsibility, authority and
accountability of each individual in
the organization.
• It facilitates decision making within
the organization due to the simplicity
of its organization structure.
• It facilitates discipline and control of
individuals in the organization for its
clarity and chain of command.
• It facilitates flexibility within the
organization as it responds to the
changing conditions and demands
of its organizational environment.
DISADVANTAGES
• It encourages the development of
excessive load of administrative
responsibility. It becomes breeding place of
“organizational dictators”.
• It encourages the development of
centralization of line controls of
responsibilities.
• It lengthens the chain of command of the
organization, which causes the delays in the
administrative decisions.
• It prevents the development of
specialization, other than its basic line
functions, which is needed to strengthen the
capacity of line executives.
• It discourages the recruitment and
training of qualifies personnel for the
organization.
Line-Staff Organization
The line staff is the pattern of most large and complex organizations. The line
authority carries the right to require the execution of orders while the staff
executive has the authority to suggest on how such orders could be
implemented. Below is the pattern of a line-staff organization structure.
Line-Staff Organization
Line-Staff Organization
ADVANTAGES
• It maintains a single line of
responsibility, authority, and
accountability.
• It provides the line executives with
staff support of specialized
knowledge or capability.
• It frees the line executive from
performing functions not directly
related to his work.
• If facilitates the recruitment and
training of people needed by the
organization.
DISADVANTAGES
• It creates a source of conflict between
line and staff executives. Line executives
may consider the staff a threat to their
own positions.
• It forces the staff executives to insist on
their advices to line executives to show
their importance in the organization and
to attain a certain degree of professional
achievement.
• It creates administrative problems if the
staff authority is not carefully defined.
Functional Organization
Functional organization fully applied the principles of division and
specialization advocated by Frederick Taylor. For a functional organization
to be effective, well qualified individuals should be appointed to all positions.
Each individual should know exactly what is expected of him and what he
expects others to do. This is done by subdividing them into departments or
division for the purpose of allowing the people work effectively in groups as
to their work alone. Below is an example of a functional organization.
Functional Organization
Functional Organization
ADVANTAGES
• It permits a high degree of
specialization.
• It is easier to fill positions in such an
organization since function
specialists are required to have only a
limited number of talents.
• It permits each specialist to become
an expert in his own field.
• It provides better technical
supervision for subordinates than
would be possible where supervisors
must perform less similar functions.
DISADVANTAGES
• It suffers from dual authority and violates
the principles of single accountability. No
organizations can run smoothly when a
single individual has more than one boss.
• Authority and responsibility often overlap.
It is to draw a sharp line between
functions.
• It is often difficult to get technical experts
to work together smoothly. Each is likely
to feel that his area of specialization is
the most important.
Nature of
Organization

INFORMAL
ORGANIZATION
– refers to shadow
organizations that evolve
through the personal
interactions, sentiments, and
social activities of individuals.
FORMAL
ORGANIZATION
– is an organization where
activities are rationally
defined, division of work is
unambiguous, and managerial
authority is explicitly
vested in individuals according
to their skills and
responsibilities.