Formal Organization Line Organization

One of the simplest types of organization structure is a line organization. It is also known as the hierarchical form of organization. As the word ‘Line’ indicates, it is a flow of authority from top to bottom resembling the line of command in a combat unit. Under this type of organization structure, the power is completely vested in one person who is known as a departmental head and these departmental heads are accountable to their superior, the general manager.

In this approach, the authorities, who are the general manager or the CEO, set the goals and directives for the employees or workers below them (in the hierarchy) to fulfil them. 

Characteristics of Line Organization

1. The operation under this structure is very simple.

2. It has a direct vertical relation.

3. An employee gets direct instruction from his or her head.

4. The management head has full authority to manage and control the operations of the department.

5. Every employee takes decisions based on the level of authority delegated to him by his immediate superior.

Merits of Line Organization

1. Simplest: The understanding of the flow of authority and its operation is simple.

2. Unity in Command: Scalar chain of command flows from top to bottom and the superior-subordinate is maintained very well in this type of structure.

3. Fixed Responsibility: Under this structure, the line manager has fixed responsibility along with fixed power and authority to make decisions and delegate tasks.

4. Better Discipline: Since the control is unified to one person, better discipline is ensured.

5. Prompt Decision: The superiors can take quick and prompt decisions since the responsibility is fixed and unity of command is clear.

6. Flexibility: The top-most authority and bottom line authority has better coordination that leads to flexibility in decision making. This, in turn, gives job satisfaction to the line managers.

Demerits of Line Organization

1. Over Reliability: The decisions are implemented from the top line executives to the bottom which leads to over-relying of decisions on the line managers.

2. Lacking Specialization: Since the tasks are delegated from the superiors which suffer the lack of specialization and expert advice.

3. Miscommunication: The authority flows from top to bottom and even the communication takes the same route. There is no communication from bottom to top, so suggestions, feedback, complaints, etc. do not reach the top executives.

4. Lack of Coordination: The degree of effective coordination is lacking as the decisions are taken by the top officials which might not always be right but the same are carried out and implemented without any scope of correction. 

5. Misuse of Authority: Since the authority is vested only on one individual for a group of people, the decisions can be biased and the power can be taken advantage of. Sometimes, work is delegated based on nepotism and sycophancy, the result will certainly be wrong and these arbitrary actions may finally ruin the whole organization.

6. Scarce Talent: The top executive needs to be skilled, knowledgeable and suitable enough in taking decisions with regard to all aspects like manpower, finance, operation, etc. and finding this kind of personnel is very difficult.

Types of Line Organization

1. Pure Line Organization

2. Departmental Organization

Pure Line Organization

Under this structure, at any given level of work, the type of work performed is almost the same by all the employees. Here an individual controls a group of employees. In the same way, many groups are formed and are placed under one individual who is the senior who takes charge and control of all.

Departmental Organization

Under this structure, different departmental heads are under the top executive or CEO. When a business is established, it is not carried off as a whole but is divided and disintegrated into many departments and sectors for the work to be carried out smoothly. Each department comes under an individual who becomes in charge of a particular department. This particular individual is known as the departmental manager. The departmental manager is the person who becomes the face of his particular department and is responsible for the work to be carried out in a particular department. 

The departmental manager is answerable to his seniors who are the general managers. In a department also, many sub-departments are made for the convenience of the work. Each department also has a sales department as its sub-departments. This can further be branched into the branch department, online sales department, export department, counter sales department, etc. 

Suitability

Line organization is still prevalent in many enterprises, especially which are small scale.

Line organization is suitable:

1. Where the work is involved in a routine manner.  

2. Where the automatic machines are employed.

Scope of Line Organization

• The idea of line organization can be followed in small scale businesses

• In places where the manpower and subordinates are less

• In companies that use automatic machinery, the requirement for skills reduces. 

• In places where the problem of labour can be rectified easily.