Organisation, Authority and Delegation
Organisation structures, span of control and Graicunas's formula, authority, responsibility and accountability, delegation versus decentralisation, and bases of departmentation.
4 min readUpdated
Organising
Organising identifies and groups the work to be done, assigns it to positions, and defines who reports to whom. The result is the organisation structure, shown in an organisation chart.
Types of structure
| Structure | Key feature | Strength | Weakness |
|---|---|---|---|
| Line | Authority flows straight from top to bottom; oldest and simplest form | Clear command, quick decisions, discipline | Overloads line managers; no specialists |
| Line and staff | Line managers command; staff specialists advise | Expert advice with unity of command kept | Line-staff conflict |
| Functional | Specialists have authority over their function across units; idea traced to F. W. Taylor's functional foremanship | Specialisation | A worker gets orders from several bosses |
| Matrix | A functional structure overlaid with project or product teams; staff report to two bosses | Flexible use of experts across projects | Dual command, slow conflict resolution |
Line authority is the right to command. Staff authority is advisory: the legal, HR or risk specialist recommends, the line manager decides. A matrix structure deliberately departs from Fayol's unity of command.
Span of control
Span of control (span of management) is the number of subordinates a manager can supervise effectively.
- A narrow span produces a tall structure with many levels: close supervision, but costly and slow.
- A wide span produces a flat structure with few levels: cheaper and faster, but supervision is looser.
- The right span depends on the nature of work, the ability of the manager and subordinates, the degree of delegation and the quality of communication.
V. A. Graicunas (1933) showed that relationships grow much faster than the number of subordinates. With n subordinates:
- direct single relationships = n
- cross relationships = n(n - 1)
- direct group relationships = n(2^(n-1) - 1)
- total = n(2^(n-1) + n - 1)
Worked example for n = 4: direct 4, cross 4 x 3 = 12, group 4 x (8 - 1) = 28, total 44. Check with the total formula: 4 x (8 + 4 - 1) = 44. For n = 5 the total is 5 x (16 + 4) = 100, of which cross relationships are 5 x 4 = 20.
Authority, responsibility and accountability
| Term | Meaning | Direction | Can it be delegated? |
|---|---|---|---|
| Authority | Right to give orders and use resources | Flows downward | Yes |
| Responsibility | Obligation to perform the assigned duty | Arises when the task is accepted | The task can be assigned, but the superior remains responsible |
| Accountability | Answerability for the final result | Flows upward | No |
The principle of parity says authority should match responsibility. Authority without responsibility invites misuse; responsibility without authority makes the job impossible.
Delegation and decentralisation
Delegation has three steps: assign duties, grant authority, create accountability. The delegator stays accountable for the result.
| Basis | Delegation | Decentralisation |
|---|---|---|
| Nature | An act between one superior and one subordinate | A policy of top management for the whole organisation |
| Scope | Narrow | Wide, pushing authority down to all levels |
| Need | Essential, since no manager can do everything | Optional, a matter of choice |
| Control | Stays with the immediate superior | Exercised by top management through overall results |
Centralisation keeps decision-making authority at the top; decentralisation disperses it systematically. No organisation is fully one or the other.
Departmentation
Departmentation is grouping jobs into units. Common bases are:
- Function - credit, operations, treasury, human resources
- Product or service - cards, remittance, trade finance
- Territory - province offices and branches
- Customer - retail, SME and corporate banking
- Process - used mainly in manufacturing
Exam pointers
- Line is the oldest and simplest structure; line and staff adds advisers without breaking unity of command.
- Matrix means two bosses, so it departs from unity of command.
- Narrow span gives a tall structure; wide span gives a flat structure.
- Graicunas: total relationships are 44 for four subordinates and 100 for five.
- Authority flows down, accountability flows up, and accountability cannot be delegated.
- Delegation is individual and essential; decentralisation is organisation-wide and optional.
Check what stuck
Questions written from this note, with the answer explained after you mark them.
Try 5 questions now
No account needed. Mark them and see each answer explained.
Sources
- Span of control, including Graicunas's relationships (Wikipedia)
- Matrix management (Wikipedia)
- Henri Fayol - unity of command and centralisation (Wikipedia)
- Scientific management - functional foremanship (Wikipedia)
Rates, limits and figures change. Confirm anything time-sensitive against the latest official notice before the exam.