Organisations and management accounting
Organisations and management accounting

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Organisations and management accounting

5.5 Line and staff relationships

The existence of an organisational structure implies that authority and control are exercised from above and pass down through the hierarchy. The relationships that result are known as line relationships. In any organisation, there should be a clear line of authority and responsibility from the top to the bottom of the hierarchy: the ‘scalar chain’ which indicates the line relationships. By contrast, staff relationships exist when a manager gives/receives advice from another organisational member. For example, the Accounting and Finance manager will provide information and analysis to help the Marketing and Production managers make decisions and control their respective operations.

Activity 5

This activity draws together some important ideas you have considered concerning organisation structure.

Consider the organisation in which you work, or one with which you are familiar. (Focus on the part of the organisation with which you are most familiar.)

  • What is the span of control?
  • How many layers or levels of management are there? Is your organisation tall or flat?
  • Is authority centralised or decentralised?
  • How clear is the definition of jobs? Do some of them overlap?
  • To how many people do employees report? Are there single or dual lines of control?

You may find it difficult to answer these questions, especially if there are dual responsibilities or reporting lines in some areas.

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