Understanding Organizational Structures and Departments
What is an Organization?
An organization is a group with a set of responsibilities, rules, and norms of behavior that all its members must abide by. This benefits the environment, allowing a company to achieve certain objectives.
What is Organizational Structure?
The organizational structure serves any organization to achieve its objectives effectively.
Departments
A department is one or more divisions of the organization. It is a well-defined area, division, or branch of an organization over which a manager has authority to perform specific activities.
The Formal Organization
The formal organization is the determination of the interrelationship between the standards, bodies, or positions, defined by standards, guidelines, and regulations of the organization to achieve its objectives.
Characteristics of Formal Organization
- Consists of hierarchies or functional levels established in the organization.
- Rational organization is one of the main features of classical theory.
- According to Taylor (a proponent of such an organization), the organization must be based on the division of labor and, therefore, on the specialization of labor, advocating for an overspecialized functional organization.
- Distribution of authority and responsibility.
Linear Organization
Linear structure is the simplest and oldest form. It is based on the organization of ancient armies and the medieval church organization.
Characteristics of Linear Organization
- Linear Authority Principle: It possesses a linear or essential principle (it has a hierarchy of authority in which subordinates obey their superiors), well-defended by Fayol in his classical theory of administration.
- Formal Lines of Communication: Communication between bodies or positions occurs only through the lines present in the organization chart, except for those at the top.
- Centralized Decision-Making: Unites the subordinate body to its superior, and so on, up to the top of the pyramid.
- Pyramidal Configuration: As the hierarchy decreases, the number of positions or organs decreases.
Advantages of Linear Organization
- Simple and easy to understand.
- Clear delineation of responsibilities of the bodies or positions involved.
- Ease of implementation.
- Considerable stability.
- It is the type of organization best suited to small businesses.
Disadvantages of Linear Organization
- The stability and consistency of formal relations can lead to rigidity and inflexibility.
- It does not respond appropriately to the rapid and constant changes of modern society.
- Based on unique and direct leadership, it can become authoritarian.
- It emphasizes the role of leadership and command, exaggerating it since it presupposes the existence of leaders capable of doing and knowing everything.
- The control unit makes the chief a generalist who cannot specialize in anything (linear organization is against specialization).
- As the company grows, the linear organization inevitably leads to congestion, particularly at the senior levels.
Scope of Linear Organization
- When the organization is small and does not require highly technical specialist executives.
- When the organization is beginning its development.
- When the tasks carried out by the organization are standardized, routine, and have few modifications.
- When the organization has a short life, and rapid implementation of work is more important than quality.
- When it is considered more advantageous to invest in external consulting or obtaining external services than to establish internal advisory bodies.