7.1. Organisational structure
Organisational structure can be seen as the line of responsibility
and authority that defines delegation and reporting from the CEO
through organisational units and down to single individuals. It
can also be seen as the hierarchical subdivision of processes and
functions into organisational units from a general level into an
increasing degree of detail. Responsibility has to do with specific
controls that are given to individuals and/or organisational units
and authority has to do with the controllability criterion for these
controls.
Organisational preference relations on the highest hierarchical
level are commonly defined in mission, value and vision statements.
Goals and objectives on lower levels are further broken
down according to the organisational structure and written into
procedures and instructions for the organisational units. It has
been argued that preferences can be structured in a means-ends
hierarchy, where means on a higher level define ends on a lower
(Elrod and Hubbard, 1979).
Several control agents may participate in one control loop with
tasks of information collection, decision-making, communication
and control actions (cf. Fig. 1). Organisational control loops may