Strategic Management: Formulation and Implementation

The Organization Chart

Understanding the overall structure of organizations facilitate organizations chart. The organization chart is a line diagram that depicts the broad outlines of an organization's structure. Organization charts vary in detail, but they typically show in visual form the various major positions or departments in the organization, the way the various positions are grouped into specific units, reporting relationships from lower to higher levels, and official channels for communicating information.
Alfred D. Chandler, Jr., "Origins of the OrganizationChart,"

The Chain Of Command

The chain of command is a common term for the vertical reporting an authority relationship in organization chart. The chain of command is the unbroken line of authority that ultimately links each individual with the top organizational position through a managerial position at each successive layer in between.

The concept of chain of command stems from two basic principles: unity of command and the scalar principle. Unity of command means that an individual should have only one boss at any given point in time. The scalar principle states that there should be a clear line of authority from position of ultimate authority at the top to every individual in the organization.