A chain of command determines the structure of reporting and authority levels in an organization. The chain of command is essential to an organization as it facilitates in the coordination of activities to ensure that an organization meets its strategic objectives. The chain of command also influences how well employees communicate with each other within the organization. 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 in such a way 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 within the organization. It also enhances accountability because it is clear who is responsible for what.
Scalar Principle
The scalar principle is an all-encompassing concept that takes into consideration the interaction between all subordinate and all supervisors. According to the scalar principle, the chain of command should be clear and unbroken from the top management to the subordinate employees. The scalar principle envisions the organizational structure as one in which hierarchy exists and continues to grow as more levels of management come into being.
Authority
Authority is the essence of the chain of command within the organization. Authority entails the right of a manager to decision making, delegation of work and resources for employees to meet organizational goals. Individuals in the same position in the chain of command have the same level of authority. Authority is typically espoused in the vertical structure. Vertical structure is the relationship between managers and subordinates. The horizontal structure, in contrast, is the relationship among subordinates of the same level.
Impact
As a company grows in its operations, its organizational structure becomes more complex. One consequence of this is an increase in overhead expenses such as payroll costs, communication and technology costs. Complexity in organizational structure may also result to bureaucracy in decision making processes especially among the senior management. This may in turn result to a loss in customers, for example, due to slow customer service.
