There are millions of organizations all over the world nowadays. They all have various aims, financial support, forms of ownership and so on. How ever they all have one feature in common, namely there is a need to build the structure of any organization, in order to guarantee its proper functioning. The term “organization chart” was used at the beginning of the twentieth century for the first time. Since that moment, all organizations started to apply organization chart with the aim of subdivision of the organization into smaller constituent parts, which sufficiently simplifies the process of work organization as well as control of work fulfillment. The general definition of the term “organization chart” states, that this is a “diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs” (Kaliski, 2001: 3). Thus in this paper the issues, related to the organization structure and organization chart will be discussed; separate attention will be paid to the importance of the organizational structure and its major characteristics and types.
Any type of work or production should be organized in the proper way, in order to guarantee its efficiency and work without standstills, thus organization is always considered to be a vitally important part of the management process. Often organization is considered to be the process and the organizational structure is the result of this process. In other words, the process of organizing enables the best use of the resources and their management, in order to reach the suggested goals. “The term ‘Organization’ is derived from the word ‘organism’ which means a structure of body divided into parts that are held together by a fabric of relationship as one organic whole” (Robbins and Judge, 2007: 69). There are usually a lot of people, working in one company, they are united into some departments, each of them is working in some concrete sphere. However, the general goals of the company can be reached only under the condition, that every worker, every department is able to fulfill the necessary function, and then as the result to reach the set goals. In order to coordinate their work and combine their effort, organization structure is needed. Organization is responsible for administration, direction and control of the work performance. In order to achieve the needed goals, based on the available materials and human resources, the proper organization should guarantee their correct usage, and avoiding of wastage. Still all the companies are different, thus they need different types of organizations, corresponding to the concrete tasks and type of work, number of workers and so on. This is done first of all with the help of creation of the organization chart, which is “a diagram showing graphically the relation of one official to another, or others, of a company. Also it is used for establishing relations between various departments for the sake of their successful functioning. Some huge organizations are split into several charts for convenience. Some concrete form of making the organization chart was not worked, it is important to put the head department on the top and the rest should be below correspondingly to their positions and their ranks. For better visualization, the names of the departments or concrete persons are put in boxes or circles. With the help of usual direct lines it is possible to show the relations between departments and positions.
Some of the reasons, why creating of the organization is important were already mentioned. Still it is necessary to list all of them. There are usually a lot of people working at any company, all of them performing certain concrete activities in relation to their position, their educational basis and their work experience. Organization in this case could guarantee that each worker is performing the appropriate function. At the same time it is really important not only for individual workers, but also for all departments to perform their functions in the most coordinated system, balancing correctly all the resources and energy. Organization also contributes to better division of the work between workers and their managers and top managers, as it is always important to delegate the routine duties to the workers, leaving the top managers to solve more sophisticated problems. Proper organization provides the chances for all workers and managers, at all levels, to increase their creativity and continue their self- development and self- realization, which is really important for quicker and more productive performance of each individual worker as well as the company in general. “Effective administration of business will not be possible without the support of sound organization structure. Delegation, department and decentralization are the tools for effective administration. Only under the condition, that every worker is fully aware of his responsibility, it is possible to seize control over the work done and have it performed in the best possible way. Organization is one of the tools, which could be used by the manager to describe the level of responsibility to each worker and be sure, that they have absolute understanding of it.
In case there are various technologies and equipment involved into the operating process of the company, there is a need to keep them in constant order and under constant control. So, organization helps to create the scheme of proper maintenance and installation process for the necessary equipment.
It was already mentioned above, that there are several types of organizations, the main are: line, functional, line and staff organization structure. Line organization is sometimes referred to as military/scalar organization and is considered to be one of the first and thus the simplest form of organization. Its second name, related to army is explained by the fact, that for the first time it appeared during the times, when the Roman army was formed, and afterwards it was used by other armies in various countries. Later, when the first factories started to appear in England, this form of organization was also used by the owners. The structure of the line organization is rather simple, because the authority is moving from the top level to the low levels step by step. Sometimes this form is called vertical organization because of this feature. The top management is responsible for taking all important decisions and for giving the corresponding orders to the general managers, whose task is to pass them to the executive departments of the company. The responsibility in such organization form is moving from the lowest level to the top management. This type of organization is rather old, however due to its advantages is still in use nowadays. First of all it is simple and easy to understand by all workers, both by managers and their subordinates and causes no questions related to authority. The process of decision – making is simple at all levels. Discipline is also supported by this type of organization, because it is absolutely clear, how the system of authority is built. Line type of organization provides all chances for further development to talented and experienced workers.
Another type of organization is functional, suggested by the founder of scientific management – F.W. Tailor. “According to him, it is unscientific to overload a foramen with the entire responsibility of running a department. In his organization he involved eight foremen, who would bear the responsibility for directing and controlling of the work process. Other workers are to follow all the instructions, given by the foremen. Taylor suggested dividing the management in accordance to concrete specialization. For example there is sales’ manager and sales department in his subordination, this means, that each manager and his department are working within the limits of his area of authority and responsibility. Nowadays a lot of big companies and production enterprises are applying exactly this type of organization, because it allows putting the narrow specialists to the proper positions, guaranteeing the best efficiency of their work fulfilled. At the same time, each of the eight managers is responsible for his concrete sphere of work and this provides all possibilities to him to concentrate better on the concrete tasks and problems.
The line and organization structure is based on the principle that “line executives and staff (specialists) are combined together. The line executives are ‘doers’ whereas staff refers to experts and act as ‘thinkers. Execution of the plans and policies of the company in this organization structure is the task of the line executives. All the research activities belong to the spheres of staff workers’ responsibility. Staff specialists are regarded “thinkers” and the line executives – “the ones who execute” their plans. For such organization it is really important to make the concrete border between line and staff workers and their functions and be sure, that these functions are evident to both groups, otherwise, instead of mutually efficient cooperation there will be conflicts and standstills. It is important to make all the workers realize, that staff and line functions are absolutely different, at the same time mutually supportive and only proper fulfillment of both could guarantee the successful work of the company in general.
All types of organization usually are supported by the organization charts. George Terry defined the organization chart as “a diagrammatical form which shows important aspects of an Organization, including the major functions and their respective relationships, the channels of supervision and the relative authority of each employee who is in-charge of each respective function” (Miles and Snow, 1992: 32). Thus in other words, the organizational chart is the diagrammatical presentation of the formal structure of the organization. It is possible to trace of the lines of authority and communication channels with the help of it, as well as receive the clear understanding of the supervision among various company departments and units. There are three types of organization charts: vertical, horizontal, departmental and circular charts. Vertical chart is one of the most popular ones, it represents the highest jobs on the top and step by step goes down to the other jobs. The lines of authority and lines of communication contribute to better understanding of the way, how these jobs coexist with each other. Horizontal chart – is the representation of the organizational structure in the form of pyramid.. Circular chart presents the top management in the center of a circle, whereas other levels are placed in concentric circles. Finally the departmental chart is created for one concrete department, defining the authority levels and the responsibilities within this department only.
The organization charts play important role for operating of any company, because they provide the understanding by all managers of the positions of authorities and relationships within the organization structure. Organization charts also contribute to better contribution of the tasks and responsibilities between workers of the company, avoiding doing double work and overlapping of the functions. The availability of the manpower and other resources could be clearly understood with the help of the organization chart. In cases, when some mistakes are made, it also contributes to understanding of the reasons for these mistakes as well as helps to work out the further plan to avoid them in the future.
Overall, this paper presents a brief explanation of the notions of organizational structure and organization chart; there is a list of reasons explored, explaining, why application of the organizational structure is so important for proper functioning of any company and organization. The main types of the organizational structure were discussed in relation to the better work organization within each concrete company, depending on the number of workers, number of departments, fields of production or operating and so on. Further the definition along with short description of the notion “organization chart” is provided, discussing in detail the types of the organization charts and their characteristics.