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Organization Structure

In business, organization structure means the relationship between positions andpeople who hold the positions. Organization structure is very important because it provides an efficient work system as well as a system of communication.

Historically, line structure is the oldest type of organization structure. The main idea of it is direct vertical relationships between the positions and tasks of each level, and the positions and tasks above and bellow each level. For example, a sales manager may be in a line position between a vice-president of marketing and salesman. Thus a vice-president of marketing has direct authority over a sales manager. A sales manager in his turn has direct authority over a salesman. This chain of commands simplifies the problems of giving and taking orders.

When a business grows in size and becomes more complex, there is a need for specialists. In such case administrators may organize staff departments and add staff specialists to do specific work. These people are usually busy with services, they are not tied in with the company product. The activities of the staff departments include an accounting, personnel, credit and advertising. Generally they do not give orders to other departments.

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