3.3.2 Organization Structure

The structure of the organization as its internal variable is a relationship between levels and functional areas, i.e. the organization's structure, built in a form that ensures the effective achievement of the goals of the organization. This design includes channels of power and communication between various administrative services, as well as information that flows through these channels. The main function of the organizational structure is to provide control and coordination. Specialization and division of labor significantly increase labor productivity in the organization. However, if the relationship between people and organizational units is not clearly defined and coordinated, the effectiveness of the specialization will be lost. The first step in this direction is the creation of an organizational structure, a scalar chain or a hierarchy.

All organizations, with the exception of the smallest, have a clear hierarchy of management, within which all members occupy a certain place in accordance with their authority ^* or status. At the bottom of the hierarchy are people who are engaged in direct work, the so-called non-management employees. These include factory workers, agency employees, etc.

Above the individual employees is the management, which consists of either a single owner or a multi-layered pyramid. At the same time, one of the characteristic features of a manager ^* is that they spend most of their time on controlling other employees. Inside the management there are three levels. The controlling, or first layer of management, which manages the activities of individual employees only — it does not control the activities of other managers. This is a master at enterprises, officials, checks the work of clerks.

The main emphasis in the activity of this level of managers falls on work with people, interpersonal relations and decisions related to technical execution.

Most power is in the hands of middle managers. Unlike the first level, they spend a lot of time managing the work of other managers. The main task of middle managers is to find the right methods for solving the most important tasks. The middle level of managers is also involved in drawing up plans and setting goals for their departments, and sometimes for the organization as a whole.

Mid-level managers are the heads of departments, department heads, etc.

Top managers are responsible for setting global objectives, shaping the development strategy and internal values ​​of the organization. Top managers manage middle managers. Typical senior managers are the president, chief executive officer, or first vice president (see Table 2. 6.).

Table 2 . 6

Typical ranks of managers

Depending on the size of the company, the same people who form plans at the highest level can also participate in their implementation at the lower level, up to the management of workers.

Managers ^{* at} all levels to varying degrees cover all areas of management, i.e. marketing, finance, operational or production management, administrative or general management, personnel ^* and other types of management.

Simultaneously with the creation of a scalar chain, a specialized division of labor takes place, that is, the assignment of specific work to specialists.

As with the hierarchy, all organizations, with the exception of the smallest, have a horizontal division of labor along specialized lines or functional areas. The choice of functional areas and the construction of a scalar chain determine the basic structure and thus the possibility of its successful activity.