OER for a Post Graduate Programme in HRM

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Wehrmlogo1.jpg MHRM

Module 1 :
Principles of Management

Module Content Map

Topic 7 : Organization Structure

Organization Chart | Key points & Activity

Back to Topic 6 : Designing the organization | Go to Topic 8: Delegation of Authority

Organization Chart

An organization chart is a diagram of all the positions in an organization and their formal relationships to one another. An organization chart illustrates an organization's overall structure with all levels of management in a comprehensive manner. See the simple organization chart below:


An organization chart helps to easily understand following vital principles of organizing:

  1. Chain of Command
  2. Unity of Command
  3. Span of Control

Chain of Command

The arrangement of various positions in an orderly way is called chain of command. The chain of command appears whenever one individual is made subordinate to another. The chain of command also suggests the routes through which information flows within an organization.

Unity of Command

The chain of command also demands another reporting relationship. If the functioning of subordinates are to be effectively coordinated, they must have a reporting relationship with only one superior. This is called unity of command. Unity of command avoids the confusion as to who should report to whom and who should issue orders.

Span of Control

Vertical reporting structure of an organization is represented by chain of control as well as unity of control. Whereas Span of Control refers to the horizontal structure. Horizontal structure means the number of subordinates reporting to a superior. The number of levels of hierarchy may reduced when the Span of Control is increased. Similarly the levels may increase when the Span is shortened.