Company
Most organizations have a or pyramidal , with one person or a group of people at the top, and an increasing number of people below them at each level. There is a clear line or chain of command running down the pyramid. All the people in the organization know what decisions they are able to make, who their superior (or boss) is (to whom they report), and who their immediate are (to whom they can give ).

Some people in an organization have who help them: for example, there might be an to the Marketing Manager. This is known as a staff position: its holder has no line , and is not into the chain of command, unlike, for example, the Marketing Manager, who is number two in the marketing department.

Yet the activities of most companies are too complicated to be organized in a single of . Shortly before the first world war, the French industrialist Henry Fayol organized his coal-mining business according to the that it had to carry out. He is generally with inventing organization. Today, most large manufacturing organizations have a , including (among others) production, , marketing, sales, and personnel or staff departments. This means, for example, that the production and marketing departments cannot take decisions without the department.

organization is efficient, but there are two standard criticisms. Firstly, people are usually more concerned with the success of their department than that of the company, so there are permanent battles between, for example, finance and marketing, or marketing and production, which have . Secondly, separating is unlikely to encourage .

Yet for a large organization manufacturing a of products, having a single production department is generally inefficient. , most large companies are decentralized, following the model of Alfred Sloan, who divided General Motors into separate operating divisions in 1920. Each division had its own engineering, production and sales departments, made a different of car (but with some , to encourage competition), and was expected to make a profit.

Businesses that cannot be divided into autonomous divisions with their own markets can decentralization, setting up divisions that deal with each other using determined prices. Many banks, for example, have commercial, , private banking, international and divisions.

An problem of is that people at lower levels are unable to make important decisions, but have to pass on responsibility to their boss. One solution to this is matrix management, in which people report to more than one superior. For example, a product manager with an idea might be able to deal directly with managers responsible for a certain market segment and for a geographical , as well as the managers responsible for the of , sales and production. This is one way of keeping at lower levels, but it is not necessarily a very efficient one. Thomas Peters and Robert Waterman, in their well-known book In Search of Excellence, insist on the necessity of pushing and autonomy down the line, but they argue that one - probably the product - must have ; four-dimensional matrices are far too .

A further possibility is to have wholly autonomous, groups or that are responsible for an entire , and are split up as soon as it is successfully completed. are often not very good for decision-making, and they run the risk of relational problems, unless they are small and have a lot of self-discipline. In fact they still a leader, on whom their success probably depends.