8.1 Organisational structures and functional areas

The process by which decision making in a business organisation is pushed down the chain of command and away from the centre of the organisation. 

• Authority

• Centralisation

• Decentralisation

• Distribution

A process where major decisions are made at the centre or core of the organisation and then passed down the chain of command 

• Authority

• Centralisation

• Decentralisation

• Distribution

The willingness of any member of staff to take credit or blame for their actions. 

• Accountability

• Authority

• Chain of Command

• Span of Control

The power or right to give orders and make decisions.

• Accountability

• Authority

• Management

• Responsibility

The number of subordinates who report directly to a manager 

• Chain of Command

• Organisational structure 

• Span of Control

• Subordinate Span

A formal system of task and reporting relationships that coordinates and motivates organisational members so they work together to achieve organisational goals.

• Chain of Command

• Organisational structure 

• Span of Control

• Subordinate Span

The line of authority that moves from the top of a hierarchy to the lowest level 

• Authority Line

• Chain of Command

• Organisational Structure 

• Span of Control

A unique area or section within an organisation specifically designed to perform a specific task.  

• Chain of Command

• Functional Area

• Organisational Structure 

• Span of Control

A formal or traditional structure where the organisational chart has many layers of authority. 

• Flat Organisational Structure 

• Functional Organisational Structure 

• Hierarchical Organisational Structure 

• Matrix Organisational Structure 

An organisational structure with a wide span of control and few levels of hierarchy (a short chain of command). 

• Flat Organisational Structure 

• Functional Organisational Structure 

• Hierarchical Organisational Structure 

• Matrix Organisational Structure