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Levels of Organization

Levels of Organization

An organization is a network consisting of people interacting to accomplish the enterprise objectives. The inter relationship is always complex as groups tend to develop conflicts and difference of opinion among themselves and in between.

Hence the structure of an organization should be designed to clarify who is to do what task and who is responsible for what results and to furnish decision-making devoid of uncertainty.


levels of organization

Organization implies to

  • Recognizing and classifying the required activities
  • Grouping of activities in order to achieve the objectives
  • Appointing a manager and assigning him with the necessary authority to lead each group
  • The provision for co-ordination vertically and horizontally

“Organization is the establishment of authority and relationships with provision for coordination between them, both vertically and horizontally in the enterprise structure,” According to Koontz.



It implies a formalized intentional structure of roles or positions. Formal organization must be flexible.

  • The formal structure is laid down by the top management
  • The levels are designed on the basis of specialization
  • Purely task oriented and not people oriented
  • Rules are very stringent and everyone is expected to follow them without fail




A network of personal and social relations arising spontaneously as people associate with one another and not restricted by the formal rules or structure.

One important aspect of organizing is the establishment of department. Department designates a distinct area, division, or branch of an organization over which a manager has authority for the performance of specified activities.

  • Spontaneous in nature
  • More people oriented
  • Based on religion, culture, common problems faced by the workforce etc.,
  • Membership is voluntary and the same person can be a member of many groups.



Why there is a need to organize? To co-ordinate the activities of the people involved in the organization’s functions for which there needs to be certain levels established to facilitate the co-operation effective. There are two types of spans,

1. Wide span

2. Narrow span

management levels


Pic Courtesy: LumenLearning



  • Wide span of management has fewer organizational levels with more number of sub-ordinates reporting to a superior. Though it proves advantageous for the superior as delegation becomes part of the process and hence work is shared, care must be taken in selecting the right people for completion of tasks and clear policies must be made to avoid confusion.
  • There is this tendency of overloaded superiors to become decision bottlenecks and there exists the danger of superior’s loss of control too.
  • This kind of management needs exceptionally qualified managers to lead the respective groups.



  • Narrow span of management involves many organizational levels with fewer number of employees reporting to a superior.
  • This facilitates close supervision, close control and fast communication between superiors and subordinates.
  • On the contrary, superiors tend to get too involved in subordinates’ work and this kind of management incurs higher costs due to many levels in the organization and there is excessive distance between the lowest and top most levels.



1. Training of Subordinates: Well trained subordinates save much time and energy of the superiors and training has to be a continuous process as the technological policies and procedures are subjected to change periodically.

2. Clarity of Delegation of Authority: Clarity implies direction and guidance from the manager’s end to the subordinate. A manager has the responsibility of clearly explaining the task and the methods involved to complete the task in a suitable manner to his subordinates.

In cases of machine handling, “On the Job Training” becomes inevitable. If not, the work will not be completed as per the schedule due to lack of clarity.

3. Clarity of Plans: In a production environment, the workers have to be apprised about the plans that are to be put into effect.

They need to know if they are workable, if the authority to undertake them has been delegated and the superior should make sure if the subordinate has understood the plans well. The policies and guidelines should match the operations and goals of the department.

4. Communication Techniques: Communicating orally to each and every subordinate is impossible; HR related plans and organizational changes cannot be handled on a one-to-one basis. In such situations a manager has to follow suitable communication techniques.

Routine directions or plans can be conveyed through intra network emails but policy decisions and major changes have to be effectively communicated to the group in a convincing manner by the manager.

5. Amount of Personal Contact needed: Many situations cannot be handled with written reports, memos, policy statements, planning documents etc., there are certain situations that warrant a personal touch between a manager and the sub ordinate, especially when a subordinate is under stress or there is an internal conflict.