Page 592 - Encyclopedia of Business and Finance

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Organizational Structure

Line-and-staff structure

President

Accounting and
Education Manager Marketing Manager
Finance Manager

Production Manager

Supervisor Supervisor Supervisor

Line Staff

Figure 2

tions as they arise. It is common to see the president or An example of a line department might be the pro-
CEO working alongside the subordinates. Because the duction department because it is directly responsible for
president is often responsible for wearing many “hats” and producing the product. A staff department, on the other
being responsible for many activities, she or he cannot be hand, has employees who advise and assist, making sure
an expert in all areas (Figure 1). the product gets advertised or that the customer service
representative’s computer is working (Boone and Kurtz,
2006, p. 259).
LINE-AND-STAFF STRUCTURE
While the line structure would not be appropriate for Based on the company’s general organization, line-
larger companies, the line-and-staff structure is applicable and-staff structures generally have a centralized chain of
because it helps to identify a set of guidelines for the peo- command. The line-and-staff managers have direct
ple directly involved in completing the organization’s authority over their subordinates, but staff managers have
no authority over line managers and their subordinates.
work. This type of structure combines the flow of infor-
mation from the line structure with the staff departments Because there are more layers and presumably more guide-
that service, advise, and support them (Boone and Kurtz, lines to follow in this type of organization, the decision-
2006, p. 259). making process is slower than in a line organization. The
line-and-staff organizational structure is generally more
Line departments are involved in making decisions
regarding the operation of the organization, while staff formal in nature and has many departments (Figure 2).
areas provide specialized support. The line-and-staff orga-
nizational structure “is necessary to provide specialized, MATRIX STRUCTURE
functional assistance to all managers, to ensure adequate A variation of the line-and-staff organizational structure is
checks and balances, and to maintain accountability for the matrix structure. In today’s workplace, employees are
end results” (Allen, 1970, p. 63). hired into a functional department (a department that

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 569