Company structure. Types of organizational authority

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Company structure.

Every organization has the same funda­mental purpose—each must perform its own function while working with the others. The organizational struc­ture is the specification of the jobs to be done within an organization and the ways in which those jobs relate to one another.

The task of each company is to distinguish. Organization chart describes organizational structure; two dimensions of the chart are used to depict: a hierarchy (the number of levels and chain of command) and a specialization (the division of task between managers and decisions who is responsible for their work at each level).

Hierarchy. Most organizations have a hierarchical structure, with one person or a group of people at the top, and an increasing number of people below. All people in organization know what decisions they are able to make, who their superior is and who their subordinates are.

Specialization is the process of identifying the specific jobs that need to be done and designating the people who will perform them. All organizations have one major job that is separated into several smaller tasks. Job specialization is a natural part of organizational growth and it has cer­tain advantages. For example, specialized jobs are learned more easily and can be performed more efficiently than nonspecialized jobs, and it is also easier to replace people who leave an organization.

Departmentalization is the process of determining how people performing certain tasks can best be grouped together. Departmentalized companies benefit from the division of activities .Departmentalization allows the firm to treat a department as a profit center—a separate company unit responsible for its own costs and profits.

Obviously, managers do not departmentalize jobs randomly. They group them logically, according to some common purpose. Thus, there are 5 types of departmentalization:

Customer departmentalization - departmentalization according to types of customers likely to buy a given product

Product departmentalization - departmentalization according to the specific product or service being created

Process departmentalization - departmentalization according to production processes used to create a good or service

Geographic departmentalization - departmentalization according to the areas of the country or the world that they serve

Functional departmentalization - departmentalization according to a group's functions or activities. Thus many firms typically have production, marketing and sales, human resources and accounting and finance departments.

The next step in organizing is to establish the decision-making hier­archy. That is, managers must define reporting relationships among positions so that everyone will know who has responsibility for various decisions and operations. Companies vary greatly in the ways in which they handle the delegation of tasks, responsibility, and authority. The development of this hierarchy results from a three-step process (chain of command):

- Assigning tasks(назначениезадач): determining who can make decisions and specifying how they should be made

- Performing task(исполнение)s: implementing decisions that have been made

- Distributing authority(распределениеполномочий): determining whether the organization is to be centralized or decentralized

A bureaucracy is organizations who implement the rules, laws, and functions of their institution. Appeared when all power concentrate in one ruling structure.

In any company with more than one person, indi­viduals must work out agreements about responsibilities and authority. Responsibility is the duty to perform an assigned task. Authority is the power to make the decisions necessary to complete the task. Company must decide who will have authority over whom. These interactions may take one of three forms of authority: line, staff, or functional.

Types of organizational authority:

Line authority is a kind of authority that flows in a direct chain of command from the top of the company to the bottom. Most organizations have a hierarchical or pyramidal structure with one person or a group of people at the top and increasing number of people below them at each successive level. All the people in the organization know what decisions they are able to make, who their superior is and who their immediate subordinates are.

Some people in an organization have colleagues who help them. This is known as a staff authority which is based on special expertise and usually involves counseling and advising line managers. Staff position holder has no line authority and is not integrated into the chain of command.

Functional authority is the right to give orders within a segment in an organization in which this right doesn’t normally exist. Functional authority is typically possessed by individuals who in order to meet their responsibilities must be able to exercise some control over organization members in other areas.

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