An organisation structure shows how a business arranges its people, who reports to whom and who is responsible for what.
The organisation chart
An organisation chart is a diagram of the structure. It shows job titles, departments and the lines of authority linking them. Reading down the chart shows who has power over whom; reading across shows people on the same level.
Key terms
- Hierarchy – the levels of management from top to bottom, like rungs on a ladder.
- Chain of command – the path along which instructions pass, from senior managers down to workers.
- Span of control – the number of people a manager directly controls. A wide span means many subordinates; a narrow span means few.
Delegation
Delegation means passing tasks and authority down to a subordinate, while the manager keeps overall responsibility. Done well it:
- Frees managers to focus on important decisions.
- Motivates staff by trusting them with responsibility.
- Develops the skills of junior employees.
Managers must delegate the task and the authority, but they cannot pass off ultimate accountability for the outcome.
Tall versus flat structures
A tall structure has many levels and narrow spans of control. It offers close supervision and clear promotion steps, but the long chain of command can slow communication.
A flat structure has few levels and wide spans. Messages travel quickly and staff often feel trusted, but each manager oversees many people and may be stretched.
| Feature | Tall | Flat |
|---|---|---|
| Levels | Many | Few |
| Span of control | Narrow | Wide |
| Communication | Slower | Faster |
There is no single 'best' shape; it depends on the size and needs of the business.