Module 1.3: Organizational Structure
Slide 1
Communication is central to the achievement of an organizations objectives and goals. Key to communication is clear organizational structure. Organizational structure can either be centralized or decentralized. Centralized is just like what the word itself suggests…all decisions are made centrally.
Decentralized is when decision making authority has been delegated to the department or lower. The idea behind decentralization of decision making is that the people closes to the job can make the better decision. This theory has credibility if the individuals making the decisions have both the education and experience to make those decisions. I have observed organizations who have decentralized to a level where individuals didn’t have the credentials to competently do the job. I have also observed organizations so centralized they smothered operational efficiency.
As you might guess, the best structure is a combination of centralized authority and decentralized authority. What do I mean by that? For instance, some companies may find that purchasing decisions below $2,500 can be made by the department, but decisions over that amount must go through central purchasing.
Slide 2
Here is an example of an organizational chart. The organizational chart is a crucial document and must be kept updated at all times. The org chart communicates the lines of authority to everyone within the establishment.
Slide 3
Another distinction made within an association is the difference between line and staff positions. Line positions are those jobs that are directly involved in achieving the organizations goals and objectives. For instance, the welder on the fabrication of aluminum jet boats or the sales manager at a retail operation or the seamstress in a clothing factory.
Staff positions they include the individuals indirectly involved with the organizations objectives. Examples of staff positions are payroll managers or the administrative assistant in the personnel department.
Slide 4
Managerial accountants would hold staff positions. Managerial accountants are essentially internal consultants who work on cross functional teams active in decision makingModule 1.3: Organizational Structure
Slide 1
Communication is central to the achievement of an organizations objectives and goals. Key to communication is clear organizational structure. Organizational structure can either be centralized or decentralized. Centralized is just like what the word itself suggests…all decisions are made centrally.
Decentralized is when decision making authority has been delegated to the department or lower. The idea behind decentralization of decision making is that the people closes to the job can make the better decision. This theory has credibility if the individuals making the decisions have both the education and experience to make those decisions. I have observed organizations who have decentralized to a level where individuals didn’t have the credentials to competently do the job. I have also observed organizations so centralized they smothered operational efficiency.
As you might guess, the best structure is a combination of centralized authority and decentralized authority. What do I mean by that? For instance, some companies may find that purchasing decisions below $2,500 can be made by the department, but decisions over that amount must go through central purchasing.
Slide 2
Here is an example of an organizational chart. The organizational chart is a crucial document and must be kept updated at all times. The org chart communicates the lines of authority to everyone within the establishment.
Slide 3
Another distinction made within an association is the difference between line and staff positions. Line positions are those jobs that are directly involved in achieving the organizations goals and objectives. For instance, the welder on the fabrication of aluminum jet boats or the sales manager at a retail operation or the seamstress in a clothing factory.
Staff positions they include the individuals indirectly involved with the organizations objectives. Examples of staff positions are payroll managers or the administrative assistant in the personnel department.
Slide 4
Managerial accountants would hold staff positions. Managerial accountants are essentially internal consultants who work on cross functional teams active in decision making.