Structure of a Business


Welcome to class! 

In today’s class, we will be talking about the structure of a business. Enjoy the class!

Structure of a Business

Structure of a Business


  1. Structure of Business
  2. Organization Chart
  3. Types of Organizational Structure.

Organizational structure is the framework by which tasks are divided, grouped and coordinated.  It entails the division of the activities of a business organization into departments, division, units and sub-units and the allocation of positions, responsibilities and authorities to the officials of a business.

Uses (purposes) of an organisation chart

  1. It shows the line of authority and responsibilities in an organization.
  2. It shows the relationship between the various departments and functionaries in an organization.
  3. It is used to show the channel of communication/information within the organization.
  4. It shows the various positions in an organization.
  5. It also shows the status and role of each member of organization.
  6. It shows the span of control of each supervisor or manager.
  7. The whole organizational structure of the form can be seen at a glance.
  8. It is easier to analyze and review the structure of the organization when it is represented graphically.
Organization chart of XYZ LTD.


  1. What is an Organization Chart?
  2. Draw the organization chart of a named business organization.
Types of organisational structure
  1. Line Organization: This refers to the direct working relationship between the subordinates and the superiors in which the line of authority and responsibility flow from the top executives to the lowest subordinates.
  2. Functional Organization: This applies where the activities of the organization are arranged according to the basic functions of the business undertaken.  Therefore similar or related activities are grouped together under each department.
  3. Committee Organization: This applies where a group of people are appointed to carry out special duties.  A committee, for instance, maybe set up to make recommendations or to execute projects.
General evaluation
  1. Explain the term organizational structure
  2. List and explain three types of organizational structure.

Reading assignment

Essential Commerce for senior secondary schools by O. A. Longe page 231-240


  1. What is an Organization Chart?
  2. State two functions of the Administration Department of a business organization.


In our next class, we will be talking about Authority: Span of Control.  We hope you enjoyed the class.

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