The reporting structure defines how power and control is cascaded throughout the organization and is usually represented in a chart, showing how the lines of control reach the various functional areas and physical locations.
Tall or flat: Organizations may be like tall pyramids in which there are many levels with a person at each level controlling as few as three people, while flatter organizations will have fewer levels, but with as many as 30 people reporting to one person. Too narrow a span leads to over-supervision and dampens initiative, while too wide a span leads to a lack of control and subordinates working in a misguided way or making errors that go unnoticed. The number of levels can be changed – Transco (the distribution arm of British Gas) reduced its management levels from 13 to 6 while still employing a staff of 16,000.
Dual reporting lines: In some cases, such as a hospital, there may be two parallel lines of responsibility – professional and administrative. This often leads to conflicts, for example, a clinical decision to treat a patient with an expensive drug may conflict with the management’s wish to control spending. ‘Dotted line’ reporting occurs when a person reports to one manager but also has responsibilities to another. This can lead to problems, for instance, where a person reports to a location manager for salary and conditions, but has a ‘dotted line’ responsibility to another manager for professional work. Each manager may have different objectives or conflicting management styles with, for example, one encouraging personal life outside the organization and the other demanding total commitment to work.
Style: The uniformed services operate a tight and rigid reporting structure, while the professions are more relaxed and allow scope for individual style and decision. Indeed, in some professional partnerships, particularly within the law and medicine, it is not clear who reports to whom, or whether there is any reporting structure at all! The reporting structure should allow a two-way process, with feedback being passed back up the line. Those managers who communicate with their staff solely in ‘orchestra style’ via large monthly meetings, video broadcasts or newsletters, run the risk of becoming too distant, vague or general in what they say and getting out of touch with those for whom they are responsible.
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