TYPES OF ORGANIZATION CHARTS Flashcards
Vertical
Traditional Structure. Used by well established businesses.
Features of Vertical Structures
- Many Levels of hierarchy
- Narrow Spans of Control
- Long Chains of command
- Autocratic Leadership
- Limited Delegation
- Centralized decision making
Horizontal
Opposite of vertical. It is a modification of the classic structures.
Features of Horizontal Structures
- Few levels of hierarchy
- Wide spans of control
- Shorter (Though more diffused) chains of command
- Decentralization
- Delegation
- Democratic Leadership
By Hierarchy
Traditional structure. Individuals at the top have more authority than those below them. It shows the chain of command in a particualr business.
By Function
Organized by indicating what employees do. Employees are grouped by departments and then organized by seniority.
By Region
It is organized according to where the business operations are. Used by businesses that carry out certain aspects of the business activity in different parts of the world.
By product
It divides the workforce based on what the company produces.
Vertical Advantages
Greater promotional opportunities
Motivates employees to work harder
Improving labor productivity
Labour retention
Vertical Disadvantages
Higher cost to hire more managers and senior staff
Workers feel alienated from the senior management
Communication is slow between top and bottom of hierarchy as structure is tall
Horizontal Advantages
Improved communication due to fewer levels of hierarchy
Cheaper as fewer managers are hired
Workers don’t feel alienated from senior management
Few promotional opportunities
Demotivate employees and increase absenteeism and Labour turnover
Training cost to develop the employees in order for them to take multiple responsibilities
Horizontal Disadvantages
Fewer levels of hierarchy
Wider span of control
