Organisational Structures

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Every business needs a framework. This provides the boundaries for it operate within. It has to perform the following functions:

  • show who is responsible for what and to whom;
  • define roles and responsibilities;
  • establish control and communications mechanisms;
  • lay out the ground rules for cooperation between all parts of the organization;
  • set out the hierarchy of authority, power and decision making.



    armies made excellent use of structure

Prussia’ emergence as a military superpower of the 18th Century was driven by the format that modern military units replicate

The Egyptians used an extraordinarily advanced method of labour division during the age of pyramid building

The structure of the labor force working on pyramids

Daniel C McCallum is generally credited with developing the first systematic sets of organizational charts, in 1855, to organize railroad building on an efficient basis.

File:Daniel Craig McCallum image.jpg

He broke his railroad into geographical divisions of manageable size. Each was headed by a superintendent responsible for the operations within his division, Each divisional superintendent was required to submit detailed reports to central headquarters, from where McCallum and his aides coordinated and gave general direction to the operations of the separate divisions. Lines of authority between each superintendent and his subordinates and between each superintendent and headquarters were clearly laid out. In sketching these lines of authority on paper, McCallum created what might have been the first organizational chart for an American business (Chandler 1962). Soon the other great railroads copied the Erie’s system, enabling the big railroads to function as effectively as small ones. As a result, railroads rapidly became the largest industrial companies of that time

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