{"id":1677,"date":"2019-10-11T21:44:14","date_gmt":"2019-10-11T21:44:14","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/?post_type=chapter&#038;p=1677"},"modified":"2024-04-25T01:51:11","modified_gmt":"2024-04-25T01:51:11","slug":"authority-and-accountability","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/chapter\/authority-and-accountability\/","title":{"raw":"Authority and Accountability","rendered":"Authority and Accountability"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Describe how to identify lines of authority and accountability<\/li>\r\n<\/ul>\r\n<\/div>\r\nIn a small business, everyone reports to the owner, right? Well, in a manner of speaking, yes. But as a business grows, there are certainly decisions to be made around who reports to whom, and how work best gets done.\r\n\r\nDetermining lines of authority and accountability for a small business clears up a lot of gray area that can slow down a well-meaning group of employees. As we discussed earlier, employees of a small business often wear many hats, and a clear reporting structure can be a casualty of that kind of arrangement. For example, if Sue tells Joe to perform \u201ctask A\u201d and Sasha tells Joe to perform \u201ctask B,\u201d Joe might have to decide between the two tasks. If he doesn\u2019t consider Sue or Sasha his manager, Joe could have a hard time prioritizing the tasks and make a wrong decision around which one is more important.\r\n\r\nEnter the organizational structure, aiding Joe in understanding who his manager is and what tasks he\u2019s responsible to complete.\r\n\r\nJust like larger companies, there are various organizational structures a small business can employ to help organize and manage people and their workloads. Some questions to ask when deciding how to arrange lines of authority:\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Will the business benefit from a top down structure, where the owner\/CEO makes all the decisions and others abide? Or would it be better to involve all the employees in making decisions, so the business can benefit from their expertise?<\/li>\r\n \t<li style=\"font-weight: 400;\">Is the business better divided up by function? Or maybe geographic region?<\/li>\r\n \t<li style=\"font-weight: 400;\">Would employees benefit from being grouped into teams to see a product or service through from inception to sale?<\/li>\r\n<\/ul>\r\nA wide variety of organizational structures exist to help define lines of authority and accountability, and every business uses one, whether it\u2019s an informal or formal adoption. Here are a few that work well for small businesses:\r\n<ul>\r\n \t<li>functional organizational structure<\/li>\r\n \t<li>matrix organizational structure<\/li>\r\n \t<li>divisional organizational structure<\/li>\r\n \t<li>virtual organizational structure<\/li>\r\n<\/ul>\r\n<h2>Functional Organizational Structure<\/h2>\r\nNew businesses and small businesses often have at least three major functions \u2013 the sales\/marketing function, the financial function, and the operations function. A logical way to organize a business would be to place all of the financial function under the financial leader, all of the operations function under an operations leader, and so on. For larger small businesses, there might be \u201csub-functions.\u201d HR, for instance, might have a leader over their HR generalists, a training department, and payroll. All of those would be sub-functions within the HR function.\r\n<h1><img class=\"aligncenter wp-image-893 \" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure.jpg\" sizes=\"(max-width: 1400px) 100vw, 1400px\" srcset=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure.jpg 1400w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-300x86.jpg 300w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-768x221.jpg 768w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-1024x295.jpg 1024w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-65x19.jpg 65w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-225x65.jpg 225w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-350x101.jpg 350w\" alt=\"A simple organizational structure with a manager and four individuals who directly report to them.\" width=\"699\" height=\"201\" \/><\/h1>\r\nThe functional organizational structure provides focus for the employees and groups them into teams that focus on a specific business need.\r\n<h2>Matrix Organizational Structure<\/h2>\r\nPractically the opposite of a functional structure, the matrix organizational structure groups employees into teams. For instance, there might be a sales and marketing person, and operations person, and a financial\/accounting person on each team. The business might have teams set up to serve specific clients. This kind of structure might be found in a small advertising firm, where a team serves the needs of one specific client.\r\n\r\n[caption id=\"attachment_2619\" align=\"aligncenter\" width=\"699\"]<img class=\"wp-image-2619\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/10\/25194245\/MatrixStructure-1024x870.png\" alt=\"See caption for link to alternative text.\" width=\"699\" height=\"593\" \/> <a href=\"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/matrix-organizational-structure-alternative-text\/\" target=\"_blank\" rel=\"noopener\">Alternative text for the Matrix Organizational Structure can be found here.<\/a>[\/caption]\r\n\r\nMatrix organizational structures can be a bit confusing for employees, in that it\u2019s not always clear to whom they report (a team leader? the leader of their specific function?) Still, for some businesses, this is the best way to manage client work.\r\n<h2>Divisional Organizational Structure<\/h2>\r\nThis kind of structure benefits a business that is dealing with clients in different geographic regions, or possibly a business that makes different products or services different types of clients. Zingerman\u2019s, a nationally known deli in Ann Arbor, Michigan, started out making sandwiches for hungry college students. They made their bread in house for their sandwiches, and soon it was in high demand. Now, Zingerman\u2019s has a deli, but also a bakehouse from which they distribute bread to local specialty food stores, a creamery from which they distribute their cheese, and even a training division, because the business is noted for their excellent customer service. Zingerman\u2019s is still a small business but divided up into divisions that each have their own leader and perform their own function.\r\n\r\n[caption id=\"attachment_2620\" align=\"aligncenter\" width=\"700\"]<img class=\"wp-image-2620\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/10\/25195656\/ZingermansStructure-1024x475.png\" alt=\"See caption for link to alternative text.\" width=\"700\" height=\"325\" \/> <a href=\"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/divisional-organizational-structure-alternative-text\/\" target=\"_blank\" rel=\"noopener\">Alternative text for the Divisional Organizational Structure can be found here.<\/a>[\/caption]\r\n<h2>Virtual Organizational Structure<\/h2>\r\n<img class=\"alignright wp-image-913\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization.jpg\" sizes=\"(max-width: 350px) 100vw, 350px\" srcset=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization.jpg 1400w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-238x300.jpg 238w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-768x967.jpg 768w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-813x1024.jpg 813w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-65x82.jpg 65w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-225x283.jpg 225w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-350x441.jpg 350w\" alt=\"Example of Virtual Organizational Structure. Flex-Time employees work at the home office. The organization also includes five other parties that do not work in the home office: Domestic Satellite Offices, International Satellite Offices, Independent Contractors, Telecommuters, and Outside Vendors.\" width=\"325\" height=\"410\" \/>\r\n\r\nSome small businesses outsource most or all of their functions. For instance, Paul Newman\u2019s \u201cNewman\u2019s Own\u201d brand is almost completely outsourced, with one company providing a product, another providing procurement, and so on. If you have a small core group of people in a central office, they would ultimately manage the virtual providers of these services.\r\n\r\nMovie production companies also operate as virtual organizations, hiring teams of people to perform the different duties on location and afterwards, rather than keeping them all on the payroll.\r\n\r\nOften, small businesses and their lines of authority and accountability grow organically, and as the business evolves their needs will change. An organizational structure that works for the business in year three might not be the same structure they\u2019re using in year seven. That\u2019s perfectly fine\u2014an HR professional can help transition employees from one kind of structure to another as seamlessly as possible, without too much disruption to productivity.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/131d122d-7342-4a09-9757-8adb815c5e45\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Describe how to identify lines of authority and accountability<\/li>\n<\/ul>\n<\/div>\n<p>In a small business, everyone reports to the owner, right? Well, in a manner of speaking, yes. But as a business grows, there are certainly decisions to be made around who reports to whom, and how work best gets done.<\/p>\n<p>Determining lines of authority and accountability for a small business clears up a lot of gray area that can slow down a well-meaning group of employees. As we discussed earlier, employees of a small business often wear many hats, and a clear reporting structure can be a casualty of that kind of arrangement. For example, if Sue tells Joe to perform \u201ctask A\u201d and Sasha tells Joe to perform \u201ctask B,\u201d Joe might have to decide between the two tasks. If he doesn\u2019t consider Sue or Sasha his manager, Joe could have a hard time prioritizing the tasks and make a wrong decision around which one is more important.<\/p>\n<p>Enter the organizational structure, aiding Joe in understanding who his manager is and what tasks he\u2019s responsible to complete.<\/p>\n<p>Just like larger companies, there are various organizational structures a small business can employ to help organize and manage people and their workloads. Some questions to ask when deciding how to arrange lines of authority:<\/p>\n<ul>\n<li style=\"font-weight: 400;\">Will the business benefit from a top down structure, where the owner\/CEO makes all the decisions and others abide? Or would it be better to involve all the employees in making decisions, so the business can benefit from their expertise?<\/li>\n<li style=\"font-weight: 400;\">Is the business better divided up by function? Or maybe geographic region?<\/li>\n<li style=\"font-weight: 400;\">Would employees benefit from being grouped into teams to see a product or service through from inception to sale?<\/li>\n<\/ul>\n<p>A wide variety of organizational structures exist to help define lines of authority and accountability, and every business uses one, whether it\u2019s an informal or formal adoption. Here are a few that work well for small businesses:<\/p>\n<ul>\n<li>functional organizational structure<\/li>\n<li>matrix organizational structure<\/li>\n<li>divisional organizational structure<\/li>\n<li>virtual organizational structure<\/li>\n<\/ul>\n<h2>Functional Organizational Structure<\/h2>\n<p>New businesses and small businesses often have at least three major functions \u2013 the sales\/marketing function, the financial function, and the operations function. A logical way to organize a business would be to place all of the financial function under the financial leader, all of the operations function under an operations leader, and so on. For larger small businesses, there might be \u201csub-functions.\u201d HR, for instance, might have a leader over their HR generalists, a training department, and payroll. All of those would be sub-functions within the HR function.<\/p>\n<h1><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-893\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure.jpg\" sizes=\"auto, (max-width: 1400px) 100vw, 1400px\" srcset=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure.jpg 1400w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-300x86.jpg 300w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-768x221.jpg 768w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-1024x295.jpg 1024w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-65x19.jpg 65w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-225x65.jpg 225w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure-350x101.jpg 350w\" alt=\"A simple organizational structure with a manager and four individuals who directly report to them.\" width=\"699\" height=\"201\" \/><\/h1>\n<p>The functional organizational structure provides focus for the employees and groups them into teams that focus on a specific business need.<\/p>\n<h2>Matrix Organizational Structure<\/h2>\n<p>Practically the opposite of a functional structure, the matrix organizational structure groups employees into teams. For instance, there might be a sales and marketing person, and operations person, and a financial\/accounting person on each team. The business might have teams set up to serve specific clients. This kind of structure might be found in a small advertising firm, where a team serves the needs of one specific client.<\/p>\n<div id=\"attachment_2619\" style=\"width: 709px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-2619\" class=\"wp-image-2619\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/10\/25194245\/MatrixStructure-1024x870.png\" alt=\"See caption for link to alternative text.\" width=\"699\" height=\"593\" \/><\/p>\n<p id=\"caption-attachment-2619\" class=\"wp-caption-text\"><a href=\"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/matrix-organizational-structure-alternative-text\/\" target=\"_blank\" rel=\"noopener\">Alternative text for the Matrix Organizational Structure can be found here.<\/a><\/p>\n<\/div>\n<p>Matrix organizational structures can be a bit confusing for employees, in that it\u2019s not always clear to whom they report (a team leader? the leader of their specific function?) Still, for some businesses, this is the best way to manage client work.<\/p>\n<h2>Divisional Organizational Structure<\/h2>\n<p>This kind of structure benefits a business that is dealing with clients in different geographic regions, or possibly a business that makes different products or services different types of clients. Zingerman\u2019s, a nationally known deli in Ann Arbor, Michigan, started out making sandwiches for hungry college students. They made their bread in house for their sandwiches, and soon it was in high demand. Now, Zingerman\u2019s has a deli, but also a bakehouse from which they distribute bread to local specialty food stores, a creamery from which they distribute their cheese, and even a training division, because the business is noted for their excellent customer service. Zingerman\u2019s is still a small business but divided up into divisions that each have their own leader and perform their own function.<\/p>\n<div id=\"attachment_2620\" style=\"width: 710px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-2620\" class=\"wp-image-2620\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/10\/25195656\/ZingermansStructure-1024x475.png\" alt=\"See caption for link to alternative text.\" width=\"700\" height=\"325\" \/><\/p>\n<p id=\"caption-attachment-2620\" class=\"wp-caption-text\"><a href=\"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/divisional-organizational-structure-alternative-text\/\" target=\"_blank\" rel=\"noopener\">Alternative text for the Divisional Organizational Structure can be found here.<\/a><\/p>\n<\/div>\n<h2>Virtual Organizational Structure<\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-913\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization.jpg\" sizes=\"auto, (max-width: 350px) 100vw, 350px\" srcset=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization.jpg 1400w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-238x300.jpg 238w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-768x967.jpg 768w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-813x1024.jpg 813w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-65x82.jpg 65w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-225x283.jpg 225w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/25204638\/VirtualOrganization-350x441.jpg 350w\" alt=\"Example of Virtual Organizational Structure. Flex-Time employees work at the home office. The organization also includes five other parties that do not work in the home office: Domestic Satellite Offices, International Satellite Offices, Independent Contractors, Telecommuters, and Outside Vendors.\" width=\"325\" height=\"410\" \/><\/p>\n<p>Some small businesses outsource most or all of their functions. For instance, Paul Newman\u2019s \u201cNewman\u2019s Own\u201d brand is almost completely outsourced, with one company providing a product, another providing procurement, and so on. If you have a small core group of people in a central office, they would ultimately manage the virtual providers of these services.<\/p>\n<p>Movie production companies also operate as virtual organizations, hiring teams of people to perform the different duties on location and afterwards, rather than keeping them all on the payroll.<\/p>\n<p>Often, small businesses and their lines of authority and accountability grow organically, and as the business evolves their needs will change. An organizational structure that works for the business in year three might not be the same structure they\u2019re using in year seven. That\u2019s perfectly fine\u2014an HR professional can help transition employees from one kind of structure to another as seamlessly as possible, without too much disruption to productivity.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"assessment_practice_131d122d-7342-4a09-9757-8adb815c5e45\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/131d122d-7342-4a09-9757-8adb815c5e45?iframe_resize_id=assessment_practice_id_131d122d-7342-4a09-9757-8adb815c5e45\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-1677\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Authority and Accountability. <strong>Authored by<\/strong>: Freedom Learning Group. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Image: Functional Organizational Structure. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Image: Matrix Organization. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Image: Divisional Organizational Structure. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Image: Virtual Organizational Structure. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":17,"menu_order":4,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Authority and Accountability\",\"author\":\"Freedom Learning Group\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Image: Functional Organizational Structure\",\"author\":\"\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Image: Matrix Organization\",\"author\":\"\",\"organization\":\"Lumen 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