The Formal Organization.

Every organization of any kind relies on some sort of structure. A surgi­cal team of doctors, nurses, and technicians — each with a number of tasks to perform — must work with a degree of coordination that obviously does not spring up by itself. A movie crew on location may look like a bewildering collection of trucks and equipment and people milling around by the dozens. But amid the seeming chaos is a director who organizes the activities of actors, camera operators, lighting and sound technicians, and a host of other people with specific jobs. Even a family bakery where Mom makes the pies, Pop drives the delivery truck, and Sis works behind the counter has an internal organization, in which the essential tasks are divided among the family members.

Although organization is universal, it is not always the same. Each com­pany, of course, has its own particular way of dividing up the tasks. Never­theless, certain types of businesses tend to be organized similarly. Many manufacturing companies have a rather rigid structure, with a broad base of production workers supervised by several layers of in-plant managers, all supervised in turn by top-level company management. In contrast, many service organizations have fewer layers; many of those who produce such services as financial advice or health care are actually managers or are re­sponsible and accountable for their own work.

The organization of any given company may also change. In the early stages, when the company is small, top-level managers and bottom-level workers work together closely. But as the company grows, it experiences several organizational changes:

1. Fewer decisions are made at the top.

2. Workers have less contact with top managers and more with middle managers.

3. Titles become more important, and jobs become more defined.

4. Communication becomes more standardized and more formal.

5. More rules and policies are established and written down.

6. Staff is expanded and given more authority.³

In most organizations, certain employees are held accountable for work done by other people. If the workers do not complete their tasks properly or on time, those who are responsible for the work must take the blame. How can a person who is responsible for the work of others actually get those people to do their jobs? By exercising authority, which is power granted by the organi­zation and acknowledged by the employees.

Organization charts show who has authority over whom, who is respon­sible for whose work, who is accountable to and for whom.

The line of authority from one level of employee to the next is usually re­ferred to as the chain of command. A person at any point in the chain of command is answerable to those above him or her on the chain and has responsibility for and authority over those below (that is, he or she can give orders, or "commands").

In a large company, there might be several chains of command. For ex­ample, a typical manufacturing firm might have three chains of command: from the production workers to the production department head to the presi­dent; from the sales staff to the marketing department head to the president; and from the accountants and bookkeepers to the finance department head to the president.

Except in the very smallest businesses, no one person can oversee and control all the work. The head of the company must therefore make use of delegation, or the assignment of some of the head's authority and responsibility to other employees. For example, the chairman of the board of directors may technically be ac­countable for all lower-level employees. But it is rare for top management to be blamed directly for the mistakes of workers at the very bottom of the chart. It is common, however, to hold a manager fully accountable for the work done by people directly under her or his supervision. A national sales manager, for example, may be fired if the company does not meet its sales expectations.

Task 1.

Here are two charts where you can see organization of various types of business. Apply one of the models to your own business which you are going to start. Define the number of employees for each level, their responsibilities and your authorities. Plan some prospects in enterprise development for future.

Chart I

Organization and

Company Growth

As a company grows, its organization becomes

more complex, and job responsibilities become

more formally defined.

Chart II