Unit 15 company structure

Learn the active vocabulary of the Unit and get ready to use it in your further work.

chain of command successive level immediate superior to report directly to = to be immediatesubordinate to be in charge of to raise capital staff position complicated incompatible to be concerned with

inherent line of product= product line to staff issue to contributeto subsidiary parent company faulty product to store warehouse

window display enquiry CEO (Chief Executive Officer)= Managing Director General manager AGM (Annual General Meeting) on a day-to-day basis

Text A

1. Read the textabout company structure and translate the highlighted parts ofthe text.

Most organisations have a hierarchical or pyramidal structure, with one person or a group of people at the top, and an increasing number of people below them at each successive level. There is a clear line or chain of command running down the pyramid. All the people in the organisation know what decisions they are able to make, who their superior (or boss) is (to whom they report), and who their immediate subordinates are (to whom they can give instructions.)

Some people in an organisation have colleagues to help them: for example, there might be an Assistant to the Marketing Manager. This is known as a staff position: its holder has no line authority, and is not integrated in the chain of command, unlike, for example, the Assistant Marketing Manager, who is number two in the marketing department.

Yet the activities of most companies are too complicated to be organised in a single hierarchy. Today, most large manufacturing organisations have a functional structure, that is, they are organised according to the functions that they have to carry out. This means, for example, that the production and marketing departments cannot take financial decisions without consulting the finance department.

Functional organisation is efficient, but there are two standard criticisms. Firstly, people are usually more concerned with the success of their department than that of the company, so there are permanent battles between, for example, finance and marketing, which have incompatible goals. Secondly, separating functions is unlikely to encourage innovation.

Yet for a large organisation manufacturing a range of products, having a single production department is generally inefficient. Consequently, most large companies are decentralised, following the model of Alfred Sloan, who divided General Motors into separate operating division in 1920. Each division had its own engineering, production and sales departments, made a different category of cars, and was expected to make a profit.

An inherent problem of hierarchies is that people at lower levels are unable to make important decisions, but have to pass on responsibility to their boss. One solution to this is matrix system, in which people report to more than one superior. For example, a product manager with an idea might be able to deal directly with managers responsible for a certain market segment and for a geographical region, as well as the managers responsible for the traditional functions of finance, sales and production. This is one way of keeping authority at lower levels, but it is not necessarily a very efficient one. Thomas Peters and Robert Waterman, in their well-known book In Search of Excellence, insist on the necessity of pushing authority and autonomy down the line, but they argue that one element – probably the product – must have priority.

A further possibility is to have wholly autonomous, temporary groups or teams, called task-force in North America, that are responsible for an entire project, and are split up as soon as it is successfully completed. Teams are often not very good for decision-making, and they run the risk of relational problems, unless they are small and have a lot of self-discipline. In fact, they still require a definite leader, on whom their success probably depends.

Notes: line authority - лінійні/ системні повноваження (зверху вниз по піраміді)