7.1 Organisational Structure – Delegation and Accountability
Learning Objective
Explain how accountability is created and maintained in a business, how it is linked to the delegation of authority, and how different organisational structures (including centralisation, line‑vs‑staff and hierarchical breadth) support the achievement of strategic objectives.
1. Linking Business Objectives to Organisational Structure (≈150 words)
Businesses set strategic objectives such as rapid market entry, cost leadership, product innovation or high customer‑service standards. The chosen organisational structure must provide a strategic fit – i.e. it should enable the flow of information, decision‑making speed and resource allocation required to meet those objectives.
Functional structure – groups similar expertise; favours cost control and specialist development but can create silos that slow response to market change.
Divisional structure – creates semi‑autonomous profit centres (product, geographic or market divisions); improves responsiveness and profit accountability but duplicates support functions.
Matrix structure – combines functional expertise with project‑oriented teams; enhances flexibility and innovation, yet requires explicit mechanisms (e.g., RACI) to resolve dual‑line authority.
Flat (horizontal) structure – few management layers; encourages rapid decisions and empowerment, but may stretch senior oversight.
Hierarchical breadth – “narrow” (many layers) versus “wide” (few layers) hierarchies affect control, communication speed and the level of delegation possible.
Understanding these links enables students to justify why a particular structure is selected to achieve specific business goals.
2. Key Definitions
Delegation: The process by which a manager transfers responsibility and authority for a specific task to a subordinate while retaining overall accountability.
Accountability: The obligation to explain, justify and be answerable for the outcomes of one’s actions.
Authority: The formal right to make decisions, give orders and allocate resources.
Responsibility: The duty to complete a task or achieve a result.
Control: Mechanisms (rules, procedures, budgets) used to ensure activities are carried out as intended.
Trust: The confidence that sub‑ordinates will act in the organisation’s best interest when given authority.
Centralisation: Decision‑making power is retained at the top of the hierarchy.
Decentralisation: Decision‑making power is distributed down the hierarchy to lower‑level managers.
Line function: Directly involved in producing the core product or service (e.g., production, sales).
Staff function: Provides specialist support to line functions (e.g., HR, finance, R&D); may create conflict over resource allocation.
3. Why Delegation Is Essential
Frees senior managers to focus on strategic issues.
Develops employee skills, motivation and career progression.
Speeds up decision‑making and improves organisational efficiency.
Ensures workload is spread appropriately across the hierarchy.
4. Steps in the Delegation Process
Identify the task or decision that can be delegated.
Select the employee based on competence, experience and current workload.
Define the scope of authority – what the employee may decide and what remains with the manager.
Set clear objectives, performance standards and deadlines.
Provide necessary resources and support (training, information, budget).
Agree reporting and monitoring arrangements (frequency, format, recipient).
Review outcomes and give feedback (recognise achievement, identify learning points).
5. Accountability Mechanisms
Performance appraisals: Regular evaluation against pre‑set targets.
Standard Operating Procedures (SOPs): Documented processes that set expected behaviour.
Reward & penalty schemes: Incentives for meeting objectives and sanctions for non‑performance.
RACI charts: Clarify who is Responsible, Accountable, Consulted and Informed for each activity.
6. Centralisation ↔ Decentralisation
Centralisation concentrates authority at senior level, providing tighter control but potentially slowing decision‑making. Decentralisation pushes authority to lower levels, increasing speed, flexibility and employee empowerment, but may reduce consistency and increase the need for robust coordination mechanisms.
Aspect
Centralised
Decentralised
Decision‑making speed
Slower – approvals pass through senior layers
Faster – decisions made close to the issue
Control & consistency
High – uniform policies
Variable – local adaptation
Motivation & development
Limited – fewer empowerment opportunities
High – employees gain authority and experience
Suitability
Stable, low‑complexity environments
Dynamic, multi‑market or product‑diverse firms
7. Line vs. Staff Functions
Line functions (e.g., production, sales) are directly involved in delivering the core product or service and have clear profit‑centre accountability.
Staff functions (e.g., HR, finance, R&D) provide specialist support; they do not generate revenue directly but influence performance.
Typical conflict: line managers may feel staff functions “hoard” resources or impose controls that hinder operational speed. Effective delegation requires clear agreements on resource allocation and joint accountability (often formalised through RACI or service‑level agreements).
8. Linking Delegation and Accountability
When authority is delegated, the delegator remains ultimately accountable for the final result. This relationship can be expressed as:
The delegator must set explicit performance criteria that roll‑up into their own targets.
In matrix or dual‑line structures, a RACI chart is used to identify the single person who is Accountable for each deliverable, even though several individuals may be Responsible.
Regular review meetings ensure that delegated authority does not drift from the agreed limits.
9. Types of Organisational Structure
Structure
Typical Delegation Style
Accountability Flow
Centralisation Level
Key Advantages
Key Disadvantages
Implications for Delegation & Accountability
Functional
Vertical – managers delegate down the hierarchy.
Linear – each employee reports to one functional manager.
High centralisation (top‑down).
Clear expertise; efficient use of specialised resources.
Silos; slower market response.
Clear line of authority makes accountability straightforward; cross‑functional delegation requires formal liaison (e.g., RACI).
Divisional (Product / Geographic)
Semi‑autonomous – division heads have authority over profit‑centres.
Dual – division heads answer to corporate HQ and to their own profit‑centre.
Moderate – some decisions devolved to divisions.
Responsiveness to market; clear profit responsibility.
Duplication of support functions; higher overhead.
Delegation largely confined within divisions; consolidated reporting to corporate ensures overall accountability.
Matrix
Horizontal – employees report to both functional and project managers.
Complex – accountability shared across two lines of authority.
Low centralisation – many decisions made at project level.
Role ambiguity; potential conflict between managers.
Requires explicit RACI or responsibility matrices and regular coordination meetings to prevent overlap and to identify the single accountable person for each deliverable.
Flat (Horizontal)
Broad – managers delegate wide authority to self‑managing teams.
Team‑based – collective accountability for outcomes.
Low centralisation – decisions made by teams.
Fast communication; high empowerment.
Risk of insufficient control; senior staff may become overloaded with oversight.
Delegation is extensive; clear team goals and shared performance metrics are vital to maintain accountability.
Hierarchical (Narrow vs. Wide)
Vertical – depth of layers determines how far authority is delegated.
Linear – each level reports to the one above.
Varies – narrow = many layers (high centralisation); wide = few layers (more decentralisation).
Too many layers can cause bureaucracy; too few can overload managers.
Delegation depth must match the breadth of the hierarchy to avoid bottlenecks or loss of control.
10. Suggested Diagram
Flowchart of the delegation chain: Senior Manager → Middle Manager → Team Leader → Employee, with two‑way arrows indicating feedback and accountability reporting at each level.
11. Benefits of Effective Delegation & Accountability
Improved decision‑making speed.
Enhanced employee motivation and skill development.
Clearer performance measurement and control.
More managerial time available for strategic planning.
Better alignment of activities with business objectives.
12. Common Challenges and Mitigation Strategies
Challenge
Potential Impact
Mitigation Strategy
Over‑delegation (loss of control)
Reduced quality; missed targets.
Set clear limits of authority and hold regular review meetings.
Under‑delegation (micromanagement)
Employee disengagement; bottlenecks.
Identify suitable tasks for delegation and train managers on empowerment techniques.
Unclear accountability lines
Confusion over who is responsible.
Document responsibility matrices (RACI) and communicate them widely.
Inadequate resources
Failure to meet delegated objectives.
Include resource allocation as a formal part of the delegation brief.
Conflict between line and staff functions
Delays in resource allocation; reduced efficiency.
Agree service‑level agreements and use joint performance targets.
13. Case Study Snapshot
Company: GreenTech Ltd., a medium‑size renewable‑energy manufacturer.
To accelerate product development, GreenTech introduced a matrix structure. Project managers were given authority to allocate engineering staff, while functional heads retained budget‑control responsibility. A formal RACI chart linked each project deliverable to a single accountable individual. Within six months, on‑time project delivery rose from 68 % to 92 % and employee‑satisfaction scores increased by 15 %.
14. Summary Checklist
Delegation transfers responsibility and authority, not accountability.
Clear objectives, authority limits, and reporting mechanisms are essential.
Accountability is reinforced through performance measurement, reporting, financial controls, SOPs and reward systems.
Organisational structure (functional, divisional, matrix, flat, hierarchical breadth) determines how delegation and accountability are organised.
Centralisation vs. decentralisation and line‑vs‑staff relationships influence the amount of authority that can be safely delegated.
Effective delegation enhances motivation, efficiency and strategic focus.
15. Review Questions
Explain why a manager remains accountable after delegating a task.
Compare how accountability is recorded in a functional structure versus a matrix structure.
Identify three risks of poor delegation and suggest one mitigation for each.
How does a RACI chart support accountability in a dual‑line (matrix) organisation?
Discuss how delegation can be used as a tool for employee development.
Outline the main advantages and disadvantages of centralising decision‑making.
Define line and staff functions and give an example of a typical conflict between them.
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