Under this system the departmental head is involved in taking and executing various decisions. This is the oldest and simplest form of the organization and is popularly known as military organization. 1) LINE ORGANIZATION : In this type of organization, authority flows from top to bottom However, this system can be suitably followed: Line Organization | Characteristics | Types | Advantages | Disadvantages, Project Organization | Types | Advantages | Disadvantages, Functional Organization | Nature of functional foremanship, Merits and Demerits of Functional Organization, Centralized & Decentralized organizations | Strength & Weaknesses, Office organization | Meaning | Characteristics | Steps involved, Weaknesses of Trade Union Movement in India and Suggestion to Strengthen, Audit Planning & Developing an Active Audit Plan – Considerations, Advantages, Good and evil effects of Inflation on Economy, Vouching of Cash Receipts | General Guidelines to Auditors, Audit of Clubs, Hotels & Cinemas in India | Guidelines to Auditors, Depreciation – Meaning, Characteristics, Causes, Objectives, Factors Affecting Depreciation Calculation, Inequality of Income – Causes, Evils or Consequences, Accountlearning | Contents for Management Studies |. They have staff wings like intelligence, medical and so on. Considering how vital an organi… This greatly reduces the establishment cost. The number of subordinates should be such that they are properly supervised. There is a lack of co-ordination among various departments. TOS 7. Since authority and responsibility flow in an ‘unbroken straight line, it is called line organisation. It is related to a specific position a person holds and his personal characteristics are ignored against his authority, even if a position becomes vacant in the organization, but still, it remains attached to that position. In this type of organization shifting of responsibility is not possible because responsibilities are fixed. There should be a hierarchical arrangement of giving commands. Its authority flows from top to bottom. In the words of J.M. The line officers may become autocratic and start deciding things without consulting their subordinate. The ultimate authority for taking all decisions lies with line officers. Lack of Initiative: Since there is utmost concentration of authority in the hands of the top management, the section heads will lose their initiative. Every department has its own line of organisation. Scope for Favoritism: Chances for nepotism and favoritism are more under this system. Line organisation is easy to operate and less expensive. Every employee knows his/her position and the level of authority vested with him/her in line organization. Vertical management, also called top-down management, refers to the various levels of management within an organization.Managers at different levels are free to focus on different aspects of the business, from strategic thinking to communicating information to operational efficiency. 4. Identification of Authority and Responsibility: 3. There is a scope for favouritism in line organisation. So line organisation enables the fixation of authority and responsibility. Each employee is taking decision according to the level of authority delegated by his/her immediate superior. Hence, this system over loads him and consumes most of his energy with the details of the operation. Under this type of line organization, the whole business organization is divided into several departments and each department is under the control of one individual who is known as Departmental Manager. The direct relationship is prevailing between the sub-ordinate and immediate superior. This line system is not without disadvantages. 4. Instability: As the success of the system mainly depends upon the ability of one or two persons, the whole organization shall upset and collapse if they leave the enterprise. The managerial growth also suffers because lower level persons are not involved in decision-making process. Matrix Organization. Below are some merits and advantages of line organization or vertical organization 1. He has to take various decisions by himself. Where the process of production is continuous or special. (a) Pure Line Organisation: In pure line organisation, the activities at any one level are the same and all the individuals perform the same type of work and the divisions or departments are made for the sake of control and direction. There are majorly five main types of formal organizational structures – line, functional, line and staff, project management and matrix. Following are the main benefits derived from functional organisation: 1. This terminology is dated and was more common in the 1950s than now. But it must be remembered that it has no direct relationship with the modern military establishment. This type of organisation is in accordance with the principle of scalar chain. The subordinates should get commands only through their immediate superiors. Line Organization. They judge the performance of persons according to their own yardsticks. 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