2.2.1—Organizational structure terminology

Organisational structure describes how work is divided, who reports to whom, where decisions are made and how information moves.

Key ideas include hierarchy, chain of command, span of control, delegation, centralisation and decentralisation. They are connected: giving a team more decision authority can speed local responses but requires information, capability and accountability.

A store manager who can reorder stock locally may respond faster to demand, while headquarters keeps pricing decisions. The structure works only if the manager receives reliable sales data and knows the limit of the delegated authority.

A structure is not just a chart and decentralisation is not automatically better. Judge the fit between authority, information, risk and the organisation's objectives.

Complete the terminology map: levels of hierarchy are the management layers; the chain of command is the formal route of authority; span of control is the number of direct reports; delegation transfers authority for a task while the manager retains ultimate accountability. Bureaucracy relies on formal roles, rules and procedures. Centralization keeps major decisions near the top, while decentralization moves them downward or outward. Delayering removes management levels, often widening spans and shortening communication routes. A matrix gives employees dual reporting relationships, commonly to functional and project managers, which shares expertise but can create conflicting priorities.