Authority, Delegation and Centralisation

The way authority is distributed within an organisation fundamentally shapes how decisions are made, how quickly the business can respond to change, and how motivated employees feel. Understanding the key concepts of span of control, hierarchy, delegation and centralisation is essential for analysing organisational design.

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Key Concepts

Hierarchy

A hierarchy refers to the arrangement of people within an organisation according to their level of authority. A hierarchical structure has multiple layers of management, each with progressively more authority as you move upward.

• Chain of command — the path along which instructions and communication flow from the top of the hierarchy to the bottom
• Levels of hierarchy — the number of layers between the most junior employee and the most senior

Span of Control

Key Definition: The span of control is the number of subordinates (employees) directly reporting to a single manager.