CHAPTER 1.

THEORETICAL FOUNDATIONS OF THE

ORGANIZATIONAL STRUCTURE OF MANAGEMENT.
1.1 The concept, essence and content of the organizational structure of
management.
The organizational structure of the enterprise is the organic unity of the
organizational structure of management and the structure of production; beyond this
unity it is inconceivable. The structure of any enterprise reflects the ordered
arrangement of its elements and the form of their interconnection. The organizational
structure is necessary for the management of various areas of the enterprise, and an
analysis of the advantages and disadvantages of different approaches to building a
management system makes it possible to make the right choice in favor of a specific
organizational structure, taking into account the state of the market and the company's
strategy.
The structure, reflecting the composition and subordination of various elements,
links and levels of management, functioning to achieve a specific goal, is called
organizational. According to Mescon, the organizational structure of management is an
integral system specially designed in such a way that the people working within it can
most effectively achieve the goal set for them
Table 1.1 Requirements to the management structure
Optimality Efficiency Economical

The number of control Management decisions Achieved by the optimal

steps should be kept to a must be made quickly. In division of managerial
minimum. The more steps, view of this requirement, work
the less efficient the the rights and
management responsibilities
 The number of control steps should be kept to a minimum. The more steps, the
less efficient management Management decisions need to be made quickly. In view of
this requirement, the rights and responsibilities should be distributed. Achieved through
an optimal division of managerial work
The management structure is seen as a necessary form of implementing
management functions. The key concepts of governance structures are elements, links
(relationships), levels and powers. Elements of the OSU can be either individual
employees (managers, specialists, employees), or services, or bodies of the
administrative apparatus in which a certain number of specialists are engaged,
performing certain functional duties. There are two areas of specialization of the OSU
elements:
• Depending on the composition of the structural divisions of the organization,
the links in the management structure are identified, which carry out marketing,
production management, scientific and technical progress, etc .;
• Based on the nature of the general functions performed in the management
process, the planning bodies organize the production, labor and management that
control all processes in the organization.
The relationship between the elements of the governance structure is maintained
through relationships that are generally divided into horizontal and vertical links. The
first have the nature of agreement and are single-level. The second is a relationship of
submission. Necessity for them arises when the management system is hierarchical,
that is, if there are different levels of management, each of which pursues its own goals.
Specialized division of labor is the fixing of this work for specialists, i.e. those
who are able to do it better than all in terms of organization as a whole. In all
organizations, except for the smallest, there is a horizontal division of labor along
specialized lines. If the organization is large enough, experts are usually grouped
together within the functional area. The choice of functional areas determines the basic
structure of both the organization as a whole and the specific unit. To a large extent, it
determines the opportunities for successful activity. No less important is how the
vertical division of labor is carried out.
The vertical division of labor represents the separation of the work of
coordination from the immediate performance of tasks. It is necessary for successful
group work. The deliberate vertical division of labor in the organization results in a
hierarchy of managerial levels.
In the management structure of an organization, linear and functional
relationships are distinguished. The first essence of the relationship is about the
adoption and implementation of managerial decisions and the flow of information
between the so-called line managers, that is, persons fully responsible for the activities
of the organization and its structural units. Functional links are associated with some or
other management functions. Accordingly, such a concept as the powers of: linear staff,
staff and functional staff is used. The powers of line managers give the right to resolve
all issues related to the development of organizations and units entrusted to them, as
well as to issue orders that are binding on other members of the organization (units).
The authority of the staff is limited to the right to plan, recommend, advise or help, but
not order other members of the organization to comply with their instructions.
Between all the above components of the organizational structure there are
complex relationships of interdependence: changes in each of them (the number of
elements and levels, the number and nature of ties and the authority of employees) make
it necessary to review all the others. So, if the management of the organization decided
to introduce a new body into the organizational structure, for example, the marketing
department (which no one had previously performed), you should simultaneously
answer the following questions:
1. What tasks will the new department solve?
2. To whom will he be directly subordinated?
3. Which bodies and divisions of the organization will bring the necessary
information to it?
 4. On which hierarchical levels will the new service be presented, what powers
are assigned to the employees of the new department?
5. What forms of communication should be established between the new
department and other departments?
The increase in the number of elements and levels in the governance structure
inevitably leads to a multiple increase in the number and complexity of relationships
that arise in the process of making managerial decisions. The consequence of this is
often a slowdown in the management process, which in modern conditions is identical
to a deterioration in the quality of the organization's management.
Functions and management structure represent two inextricably interconnected
and mutually conditioning sides of a single whole - organization of the management
system and act accordingly as the content and form of the management process. The
interdependence of functions and management structure presupposes the primary
functions and the secondary nature of the management structure. However, the primary
and secondary functions and structures are relative, and not absolute [9].
The number of persons subordinate to one leader represents the sphere of control.
If a fairly large number of people are subordinated to one leader, then there is a broad
scope of control, which results in a flat management structure. If every manager has a
small number of employees, that is, when the scope of control is narrow, then in this
case one can speak of a multilevel structure.
Speaking about the issue of the sphere of control, we will consider the opinions
of scientists on the scope of control or the scope of government. Scientist Urvik believes
that the ideal number of subordinates for a manager of any scale is from 3 to 30 [20].
This number varies depending on the degree of complexity, the nature of the work
performed, and also take into account the subjective capabilities of the manager, his
ability to cooperate with the team. The manager can reduce the time needed for
management and control, by delegating authority, to perform a clearly defined task,
drawing up a clear and concise plan, developing appropriate methods and approaches,
using benchmarks to ensure that his subordinates comply with the corresponding plan
and schedule.
The average value of the control range is 7-10. At the higher stages of
management it is 4-5, and on the lower levels, when performing simple work, it can
reach 20-30 and even much more.
The rule of control expresses the number of subordinates, which are managed by
the manager. According to Woodward, the number of subordinates reporting directly
to the president of the company varies from 2 to 18, and the average rate of
manageability is 6. The standards of manageability of managers of the "first line" range
from 10 to 90, and the average is 37 employees .
Powers are a limited right to use the resources of an organization and direct the
efforts of subordinates to perform certain tasks. Tasks, together with the powers, can
be delegated (transferred) to a person who assumes responsibility for their
implementation.
Responsibility is the responsibility to perform tasks and be responsible for their
solution.
Power is the right to influence the behavior of other people and force them to act
in a certain direction.
The regular reproduction of such activities as the distribution of tasks, the
management and coordination of the actions of employees, forms a structure, and the
potentiality of their various combinations explains the differences in organizational
structures.
The structure is not something once and for all given. It is constantly evolving.
When it comes to organizational structures, we mean the distribution and coordination
of labor processes. The management structure of an organization is a set of methods for
dividing the labor process into specific work assignments and coordinating their
implementation.
 After choosing a strategy and developing a follow-up plan, management must
conduct a thorough review of the structure of the organization as a whole and of the
individual units in order to determine whether it contributes to the achievement of the
set goals. The strategy determines the structure. When implementing or changing the
strategy, management should always take into account its relationship with the structure
and combine the formation of the structure of the organization and planning. The
structure is based on a strategy and must ensure its effectiveness as much as possible in
terms of the overall situation.
We examined the basic theoretical concepts, definitions and characteristics
associated with the organizational structure of the enterprise enterprise. Table 1.2
presents the main of these components of the polyhedron, called the organizational
structure of management.
Characteristics Content
Elements Services, groups and employees performing management functions
in accordance with the adopted division of labor
Are the nature of harmonization and are single-level
Horizontal Relationships subordination, determined hierarchy of management
Connections
Vertical Reflect the movement of managerial decisions and information
Connections between line managers
Linear relations Reflect the movement of information when performing various
control functions
Functional Rights and duties related to the use of resources and the
connections performance of assigned tasks
Authority and Transfer of tasks and powers to a person who assumes
responsibility responsibility for their implementation
Delegation The right to influence the behavior of other people and force them
to act in a certain direction
Power Defined by the number of departments, teams of skilled
professionals and management levels
Complexity Characterizes the degree of concentration of decision-making at the
highest level of management
Level of Defines the use of mechanisms for integrating processes, activities,
centralization and resources
Coordination Determines the extent to which regulations and regulatory
mechanisms are used to manage people's behavior