Line and Staff Organization

          With large-scale business operation, the complexities of management raise the need for full-time specialists who can give advice about certain key areas. Line and staff organization seeks to keep all the advantages of line organization while adding advisory specialists to the staff in certain areas. These advisory specialists do not have line authority or subordinates to whom they issue orders. Instead, they provide top management with the expertise needed for making decisions in special areas.
          The need for experts to become full-time staff members was first recognized in the areas of legal operations and personnel administration: these needs were filled by advisory experts. In today's business world most large firms also have staff experts in such areas as government regulations, international trade, industrial relations, procurement, economics, credit administration, budget control, and corporation taxes.
          Modern organization theory often distinguishes among these types of specialized staff: advisory, service, and control.

1.   Advisory staff experts are responsible for advising top management and line managers about business procedures in their particular areas of expertise. Example include the legal staff and the industrial relation staff.

2.   Service staff experts perform specific work for departments throughout the organization. For example, the purchasing department may be responsible for buying all materials used in the organization. Similarly, the personnel department may have authority to make final decisions about hiring, rather than the department is a service staff group, since it is performing (hiring) for other departments.

3.   Control staff experts regulate some of the activities of others in the firm. For example, the budget administrator must determine that a department's request for expenditures are within its approved budget. If they are not, the expenditure is not approved. In the same way, the controller usually has the power to accept or refuse request for special funds. In such a case, the control staff is not giving orders but is merely enforcing the wishes of top management, which has delegated authority to the control staff.

          This in line and staff organization, full-time staff specialists may have advisory, service, or control relationships with officers of other departments. But remember that these specialists do not have basic line authority; their relationship to other departments is advisory, as indicated by the dashed line.