A chain of command determines the structure of reporting and authority levels in an organization. This facilitates the coordination of activities to ensure that the organization meets its strategic objectives and also influences how well employees communicate with each other. Organizations exhibit different command and leadership structures, with some having less hierarchy and levels of authority than others.
Unity of Command
Under a commanding principle, an organization should be structured so that an employee reports to only one supervisor. To avoid conflict within the organizational structure, an employee should not report to two or more managers. The unity of command principle provides a clear reporting and authority structure and also enhances accountability because it is clear who is responsible for what.
The scalar principle is an all-encompassing concept that considers interaction between all subordinates and all supervisors. The chain of command should be clear and unbroken from top management to subordinate employees. This principle promotes an organizational structure in which hierarchy exists and continues to grow as more levels of management are added to it.
Authority and Structure
Authority is the essence of the chain of command within the organization. It gives managers the right to make decisions and delegate work and resources so that employees can meet organizational goals. Individuals in the same position in the chain of command have the same level of authority. This typically works as a vertical structure, outlining the relationship between managers and subordinates. A horizontal structure, in contrast, is the relationship among subordinates of the same level.
As a company grows its operations, its organizational structure becomes more complex. This may increase overhead expenses such as payroll, communication and technology costs. More complex organizational structures may also have more bureaucratic decision making processes, especially among senior management. This may have negative effects. For example, a bureaucratic system that slows down customer service response might result in a loss of customers.