Two types of organizational structures are found in the business environment: centralized and decentralized. Each structure offers advantages and disadvantages for business owners. Each structure offers advantages and disadvantages for business owners.
In an organizational structure, “chain of command” refers to a company's hierarchy of reporting relationships -- who must answer to whom. A proper chain of command ensures that every task, job position and department has one person assuming responsibility for performance.
An organization can structure itself into departments in the following ways. Functional Departmentalization In functional departmentalization, an organization is organized into departments based upon the respective functions each performs for the organization.
Simply, span of control refers to the number of subordinates under the manager’s direct control. As an example, a manager with five direct reports has a span of control of five. To many or to few direct reports is a good way to view how efficent an organization is as long as it looked at in the context of the companys organizational structure.