Organisational Structure and Design- BBA/MBA Note

Posted on Jun 3 2020 - 6:11pm by admin

(a) Line Organization

Line organization structure is also known as scalar, military or vertical organisation and perhaps is the oldest form. All other types of organisation structure have mostly been modifications of the line organisation.

According to McFarland
Line structure consists of the direct vertical relationship which connect the positions and tasks of each level with those above and below it.

According to Allen
Organizationally, the line is the chain of command that extends from the board of directors through the various delegations and re delegations of authority and responsibility to the point where the primary activities of the enterprise are performed.

This concept holds that in any organisation or hierarchy derived from a scalar process, there must be single head who commands it. Although an executive can delegate authority, he has ultimate responsibility for results. Line organisation can be designed in two ways:

i. Pure Line Organization
Under this form, similar activities are performed at a particular level. Each group of activities is self-contained unit and is able to perform the assigned activities without the assistance of others. Pure line organisation may be depicted as follow:

BBA/MBA Notes

ii. Departmental Line Organisation
Under this form, entire activities are divided into different departments on the basis of similarity of activities. Each department is place under on departmental superintendent. All persons in the department are subject to control by the departmental head. The basic objective of this form is to have uniform control, authority and responsibility.

Organisation Structure and Design

Features of Line Organization
i. Line organization is the simplest form of organization.
ii. Line of authority flows from top to bottom.
iii. Specialized and supportive services do not take place in these organizations.
iv. There are no staff specialists.
v. Unified control by the line officers can be maintained since they can independently take decisions in their areas and spheres.
vi. All employees at the same level are independent of each other.
vii. This kind of organisation always helps in bringing efficiency in communication and bringing stability to a concern.

Merits

i. Simple
Line organisation is the simplest to establish and operate.

ii. Better discipline
It is easy to maintain discipline among the employees of the organization because each position is under the direct control of its immediate superior position.

iii. Fixed responsibility
In this type of organisation, every line executive has got fixed authority, power and fixed responsibility attached to every authority.

iv. Flexibility
There is a coordination between the top most authority and bottom line authority. Since the authority relationships are clear, line officials are independent and can take decisions flexibility. This flexibility gives satisfaction to line executives.

v. Prompt decision
Without consulting others, managers can take independent decisions.

vi. Unity of command
In these organizations, superior-subordinate relationship is maintained and scalar chain of command flows from top to bottom.

Demerits

i. Over reliance
The line executive’s decisions are implemented to the bottom. This results in over-relying on the line officials.

ii. Lack of specialization
A manager has to perform a variety of functions which might not be inter-related. As a result, the quality of management tends to be poor as all managers cannot be good in all functions.

iii. Low morale
There may be lack of initiative in the subordinates because their opinions and grievances are not properly communicated upwards.

iv. Inadequate communication
The policies and strategies which are framed by the top authority are carried downwards. This leaves no scope for communication from the other end. The complaints and suggestions of lower authority are not communicated upwards to the top authority. So there is one-way communication.

v. Instability
Succession problem is acute in line organisation and there may be lack of continuity when key executive retire.

vi. Lack of coordination
Whatever decisions are taken by the line officials, in certain situations even wrong decisions are carried down and implemented in the same way. Therefore, the degree of effective coordination is less.

vii. Authority leadership
The line officials have tendency to misuse their authority positions. This leads to autocratic leadership and monopoly in the concern.

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