Forms of Organisational Structure: Line , Functional, and Line and Staff Organisation (with respective advantages and disadvantages)
The adoption of a particular form of organisational structure largely depends upon the nature, scale and size of the business. The organisational structure is primarily concerned with the allocation of activities or tasks and delegation of authority.
1. Line Organisation:
Line organisation is the simplest and the oldest type of organisation. It is also known as scalar organisation or military type of organisation. In the words of J.M. Lundy, “It is characterized by direct lines of authority flowing from the top to the bottom of the organizational hierarchy and lines of responsibility flowing in an opposite but equally direct manner.”
An important characteristic of such type of organisation is superior-subordinate relationship. Superior delegates authority to another subordinate and so on, forming a line from the very top to the bottom of the organisation structure. The line of authority so established is referred as “line authority.” Under this type of organisation authority flows downwards, responsibility moves upwards in a straight line. Scalar principle and unity of command are strictly followed in line organisation.
This type of organisation resembles with the army administration or military type of organisation. As in case of military, commander-in-chief holds the top most position and has the entire control over the army of the country, which in turn is developed into main area commands under major-generals.
Each area has brigade under brigadier-generals, each brigade is fabricated into regiments under its colonels, each regiment into battalions under majors, each battalion into companies under captains, each company sub-divided under its lieutenants and so on drawn to corporal with his squad.
Types of line organization:
Line organisation is of two type’s viz. (a) Simple or Pure Line Organisation (b) Departmental Line Organisation
(a) Simple or Pure Line Organisation:
In the ‘Pure Line organisation’ the activities (at any level of management) are the same with each man performing the same type of work and the divisions primarily exist for the purpose of control and direction. In practice, such type of organisation rarely exists.
The following diagram shows the pure line organisation:
In this type of organisation all the workers perform the same type of work. The departmental divisions are made only for the sake of convenience of supervision and management.
(b) Departmental line organisation:
Under this type of organisation, an organisation is divided into various departments headed by different departmental heads. All the departments operate under the ultimate control of general manager. The orders flow directly from the general manager to all the departmental heads that in turn pass on to their respective subordinates.
Likewise, the subordinates, inturn, communicate the orders to the workers under them. The various departmental heads will be perfectly independent of each other and they will enjoy equal status the central idea, in the formation of such departments is not similarly or dis-similarity of functions or activities, but unity of control and line authority and responsibility from the top of the organisation to the bottom.
Suitability of line organization:
The line organisation can be successfully followed where (a) scale of operations is limited or business is on small scale basis, (b) work is simple and routine in nature, (c) business is being done in continuous type of industries like oil refining, sugar, spinning and weaving etc., (d) the labour management problems are not complex and can be easily resolved, (e) the machinery is automatic, and (J) the workers are disciplined.
Characteristics of line organization:
The main features of line organisation are as follows:
1. Orders and instructions flow from top to the bottom, whereas requests and suggestions move from bottom to top.
2. The principle of unity of command is the most salient feature of this type of organisation. In simple words, the orders are received by the subordinates from one boss.
3. The subordinates are accountable to their immediate superior.
4. There are limited numbers of subordinates under one superior.
5. This is simple to operate and control.
6. Co-ordination can be easily achieved.
Advantages of line organization:
Following are the main advantages of line organisation:
It is very simple to establish and operate. It can be easily understood by the employees.
2. Fixed responsibility:
Duties and responsibilities are clearly defined for each individual with reference to the work assigned to him. As a result everybody knows to whom he is responsible and who are responsible to him. Nobody can avoid responsibility.
This type of organisation ensures better discipline in the enterprise. Singleness of responsibilities facilitates discipline in the organisation. The workers at the lower levels will be more loyal and responsible to one single boss rather than to a number of bosses.
It is flexible in the sense that it is subject to quick adjustments to suit to changing conditions. In the words of Wheeler, “It permits rapid and orderly decisions in meeting problems at various levels of organisation”. In simple words, it is more adaptive to the changed circumstances.
It helps to achieve effective co- ordination. All the activities pertaining to single department are controlled by one person.
6. Direct communication:
As there will be direct communication between the superior and the subordinates at different levels it would be helpful in achieving promptness in performance.
7. Unity of command:
Every worker is accountable to one boss in the department under this type of organisation. In this manner it is in accordance with the principle of unity of command.
It is not complex and expensive. It is simple and economical in operation. It does not need any expert and specialised personnel.
9. Quick decisions:
On account of its simple operation and unified control and responsibility, decisions can be taken promptly. The process of decision-making is further quickened as the decision is taken by one person.
10. Executive development:
Under this organisation, the department head is fully responsible for every activity in his department. He discharges his responsibilities in an efficient manner. He comes across many problems and obstacles in performing his duties.
This provides him an ample opportunity to enhance his capabilities and organisational abilities and is greatly helpful in his overall development and performance.
Disadvantages of line organization:
Following are the main drawbacks of line organisation:
The main disadvantage of this system is that it tends to overload the existing executive with too many responsibilities. The work may not be performed effectively on account of innumerable tasks before the single executive.
2. Lack of specialization:
Absence of managerial specialisation is the major drawback of this system. On account of many functions and complexities it is very difficult for a single individual to control all the matters effectively.
The executive may not be expert in all aspects of managerial activities. The burden of responsibilities on the shoulders of the manager can crush him under the heavy workload.
3. Scope for favoritisms:
There may be a good deal of favouritism and nepotism under this type of organization. As the concerned officer will judge the performance of the persons at work according to his own norms, it is possible that efficient people may be left behind and inefficient or ‘yes men’ may get higher and better posts.
4. Lack of co-ordination:
In reality it is very difficult to achieve proper coordination among various departments operating in an organisation. This is because each departmental manager or head carries the functioning of his department in accordance with the ways and means suitable to him.
This leads to lack of uniformity in operation among various departments which is detrimental in achieving proper coordination in the overall functioning of the various departments operating in the organisation.
5. Lack of initiative:
Under line organization, ultimate authority lies in the hands of top management and departmental managers or heads have little powers. This adversely affects their initiative and enthusiasm to motivate the subordinates working under them.
6. Lack of communication from lower ranks:
Under line organisation suggestions move from down to upwards the superiors usually do not pay attention to suggestions sent by lower ranks. This leads to inadequacy of communication from subordinates to superiors.
2. Functional Organisation:
F.W. Taylor, who is better known as the father of scientific management developed the concept of ‘Functional Organisation’. As the very name suggests, functional organisation implies that the organisation should be based on various functions. Taylor’s functional approach is mainly based on principle of specialization and tries to bring about organisational balance.
The principle of specialisation embodies the concept that both the workers and the supervisors can develop a higher degree of proficiency by separating the manual from the mental requirements. Taylor recommended that there should be functionalisation even at the shop level where workers have to produce goods. He felt that the usual practice of putting one foreman incharge of some 40 to 50 workers should be avoided.
Taylor’s concept of Functional Foremanship (as he puts it), is a system comprising of eight different foremen discharging different functions. Every worker in the organisation is directly connected with these foremen.
The eight specialist foremen are:
(a) Route Clerk, (b) Instructions Card Clerk, (c) Time and Cost Clerk, (d) Shop Disciplinarian, (e) Gang Boss, (f) Speed Boss, (g) Repair Boss, and (h) Inspector. The first four bosses operate from Planning Department, whereas the other four are known as Executive Functional Bosses. They function in the production department.
A brief explanation of these eight functional foremen is given below:
(a) Route clerk:
He lays down the exact path or route to be followed by raw material transforming it into finished product.
(b) Instruction card clerk:
He prepares detailed instructions to be followed in doing the work as per the route laid down by the route clerk.
(c) Time and cost clerk:
He determines the total time to be taken in the completion of a product and also works out the cost of production per unit and total cost. He prepares various work schedules and cost sheets in order to have proper control over time and cost incurred in producing goods.
(D) Shop disciplinarian:
He is responsible for maintaining proper discipline in the organisation. In fact, he is the guardian of orderliness in the factory. In the words of Kimball and Kimball Jr. “The shop disciplinarian is responsible for discipline and good order, fie is also the peacemaker and assists in adjusting wages.”
He is helpful in resolving minor disputes regarding wages, holidays, working conditions and hours of work etc. He initiates a proper code of conduct in the organisation.
(e) Gang boss:
He makes the availability of different machines and tools required by workers to carry out their work. He also provides various production designs, drawings, raw materials etc.
(f) Speed boss:
He controls the speed of different machines operating in the organisation. He sometimes demonstrates the workers the proper speed with which the machines should operate. He undertakes proper supervision over speed of machines.
(g) Repair boss:
He is concerned with proper maintenance and repairs of machines for keeping them in working order. In the words of Spriegel, “His job of maintenance includes cleaning the machine, keeping it free from rust and scratches, oiling it properly and preserving 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 undertake immediate repair of the defective machines so that the work may not suffer.
He checks and certifies the quality of work i.e., whether or not it is up to pre-determined standards. Achievement of pre-set standards is confirmed by the inspector. He develops the feeling of quality consciousness among the workers. In order to carry out his job effectively, an inspector must possess proper knowledge and the technicalities involved in quality control.
The following diagram shows Taylor’s Functional Foremanship:
While developing the concept of Functional Foremanship, F.W. Taylor suggested that it is unscientific to overload a foreman with entire responsibility of running a department. He advocated that direction of work should be decided by functions and not be mere authority.
He thought that to be successful in performing his duties a foreman should possess various qualities viz., education, special or technical knowledge, manual dexterity or strength, tact, energy, honesty, common sense and good health”.
Spriegel has nicely explained Functional Organization. “Each worker, instead of coming into contact with one superior, would receive his orders from a group of specialised supervisors, each of whom performs a particular function.”
Functional organisation also operates at higher level of management. The whole work in the organisation is divided in various departments. Similar type of work and transactions are put in one department under the control of a departmental manager or head. Various departments are also known as functional areas of management viz., Purchases, Sales, Finance, Production, and Personnel etc. The respective managers of these departments will be responsible for carrying out various activities of their departments in the organisation.
For example, marketing manager will be responsible for carrying out marketing activities and personnel manager will be responsible for looking after the personnel matters in all the departments of the organisation.
The underlying idea of functional organisation at the top level of management is that a subordinate anywhere in the organization will be controlled and commanded directly by number of managers operating in different departments.
Advantages of functional organisation. Following are the main benefits derived from functional organisation:
This system derives the benefits of specialisation. As every functional incharge is an expert in his area, he will guide using his specialisation and with the help of the subordinates, try to attain the specified objectives.
2. Increased efficiency:
This type of organisation ensures enhanced efficiency as the workers operate under the expert and competent personnel and perform limited operations.
3. Limited duties:
The functional foremen have to carry out the limited number of duties concerning their area of work. This considerably reduces the burden of work and makes possible for the foreman to carry out the work in the best possible manner.
4. Scope for expansion:
Functional organisation offers a great scope for expansion of business enterprise without any dislocation and loss of efficiency as each man grows on account of his own speciality.
It is flexible pattern of organisation. A change in organisation can be made without disturbing the whole organisation. In the words of Louis A. Allen, “Function as a whole can he cut by eliminating positions at the lower levels without seriously affecting its total performance.”
Disadvantages of Functional Organization:
Despite the above advantages, this type of organization suffers from the following disadvantages:
1. Conflict in authority:
The authority relationship violates the principle of ‘unity of command’. It creates several bosses instead of one line authority. It leads to conflict and confusion in the minds of the workers to whom they should obey and whom they should ignore.
2. Difficulty in pinpointing responsibility:
On account of the non-application of the principle of ‘unity of control’, it is very difficult for the top management to fix the responsibility of a particular foreman. There arises a tendency for shirking of responsibility.
This pattern of organisation is quite impracticable and expensive. Multiplicity of experts increases the overhead expenditure. The small organisations cannot afford to install such a system.
4. Discipline is slackened:
Discipline among the workers as well as lower supervisory staff is difficult to maintain as they are required to work under different bosses and this may hamper the progress of the organisation.
5. Lack of co-ordination:
Appointment of several experts in the organisation creates the problem of co-ordination and delay in decision-making especially when a decision requires the involvement of more than one specialist.
3. Line and Staff Organisation:
The line and staff organisation is an improvement over the above mentioned two systems viz, line organisation and functional organisation. The line organisation concentrates too much on control whereas the functional system divides the control too much.
The need was, therefore, for a system that will ensure a proper balance between the two. The need has been fulfilled by line and staff organisation. The system like line organisation also owes its birth to army.
The commanders in the field who are line officers are assisted by the staff that helps them in formulating strategies and plans by supplying valuable information. Similarly in organisation, line officers get the advice of the staff which is very helpful in carrying on the task in an efficient manner. However, staff’s role is advisory in nature. Line officers are usually assisted by staff officers in effectively solving various business problems.
The staff is usually of three types viz:
(a) Personal Staff:
This includes the personal staff attached to Line Officers. For example, personal assistant to general manager, secretary to manager etc. The personal staff renders valuable advice and assistance to Line Officers.
(b) Specialised Staff:
This category includes various experts possessing specialised knowledge in different fields like accounting, personnel, law, marketing, etc. They render specialised service to the organisation.
For example, a company may engage a lawyer for rendering legal advice on different legal matters. Similarly, it may engage a chartered accountant and a cost accountant for tackling accounting problems.
(c) General Staff:
This comprises of various experts in different areas who render valuable advice to the top management on different matters requiring expert advice.
Advantages of Line and Staff Organization
Important advantages of Line and Staff Organisation are:
This type of organisation is based on planned specialisation and brings about the expert knowledge for the benefit of the management.
2. Better decisions:
Staff specialists help the line manager in taking better decisions by providing them adequate information of right type at right time.
3. Lesser Burden on line officers:
The work of the line officers is considerably reduced with the help of staff officers. Technical problems and specialised matters are handled by the Staff and the routine and administrative matters are the concern of Line Officers.
4. Advancement of research:
As the work under this type of organisation is carried out by experts, they constantly undertake the research and experimentation for the improvement of the product. New and economical means of production are developed with the help of research and experimentation.
5. Training for line officer:
Staff services have proved to be an excellent training medium for Line Officers.
Disadvantages of Line and Staff Organisation:
1. Conflict between line and staff authorities:
There may be chances of conflict between line and staff authorities. Line Officers resent the activities of staff members on the plea that they do not always give correct advice. On other hand staff officials complain that their advice is not properly carried out.
2. Problems of line and staff authority:
There may be confusion on the relationship of line and staff authorities. Line Officers consider themselves superior to Staff Officers. The Staff Officers object to it.
3. Lack of responsibility:
As the staff specialists are not accountable for the results, they may not perform their duties well.
4. The system is quite expensive:
The appointment of experts involves a heavy expenditure. Small and medium size organisations cannot afford such a system.
5. More reliance on staff:
Some of the line officers excessively rely on the staff. This may considerably reduce the line control.