Organizational Structure• Work Specialization• Departmentalization• Centralization & Decentralization• CHAIN of COMMAND• SPAN of CONTROL• Formalization

Six Key Elements of Organization Structure

Muhammad EjazSemester 3Section AEnterprise ManagementSir Hafeez ur Rehman

Contents• Chain of Command

– Three factors to understand Chain of Command

• Span of Control

• Organization Chart

• Advantages and Disadvantages of Span of Control

• Real Organization Chart

• Holacracy

Chain of CommandFlow (delegation and use) of AuthorityResponsibility

At every Level• From Top to Bottom

Within Organization

Why Chain of Command? What would you do? Who reports to whom?To whom should you go if

have some issues/problems?

Three factors help to understand chain of command Authority

The rights inherent in a managerial position•Line Authority•Staff Authority

Acceptance theory of authority

Responsibility

Managers use their authority to assign taskSubordinate is willing to feel obligation

Unity of CommandA person should report to only one manager

Span of Control“The number of subordinates that manager or supervisor can efficiently and effectively manage / Control”These numbers varies with the

Type of work Complexity Variable work reduces it to 6 whereas routine, fixed work

increases it to 20 or more.

Types of control according to Structure1. Narrow Span of Control (Tall)2. Wide Span of Control (Flat)

Organizational Chart

Advantages of Chain/Span of Command Clear reporting relationship exist Unity of Command Responsibility and accountability are clearly assigned Employees are not confused about whom to go to for resources,

assistance, and feedback It assistant customers to whom they should contact

Office Politics Time consuming for some decisions Jobs are no longer rigidly defined employees empowerment Position Power Bureaucracy High Compensation Costs Limited Initiative

Disadvantages of Chain/Span of Command

HOLACRACYA Complete System for Self Organization

In Traditional Companies

• Job descriptionsEach person has exactly one job. Job descriptions are imprecise, rarely updated, and often irrelevant. 

• Delegated AuthorityManagers loosely delegate authority. Ultimately, their decision always trump.

• Big Re-OrgsThe org structure is rarely revisited, mandated from the top.

• Office PoliticsImplicit rules slow down change and favor people “in the know”.

With Holacracy

• RolesRoles are defined around the work, not people, and are updated regularly. People fill several roles.

• Distributed AuthorityAuthority is truly distributed to teams and roles. Decisions are made locally.

• Rapid IterationsThe org structure is regularly updated via small iterations. Every team self-organizes.

• Transparent RulesEveryone is bound by the same rules, CEO included. Rules are visible to all.