The structure is the pattern in which various parts or components are integrated or interconnected and this prescribes the relationships among various activities and positions, as these positions are held by various persons, a structure is called the relationships among people in the organization and thus organization structure refers to the differentiation and integration of activities and authority, role and relationships in the organization. Differentiation is the differences in cognitive and emotional orientations among managers in different functional departments and differences in formal structure among these departments. Integration refers to the quality of the state of collaboration that is required to achieve unity of effort by the organization. The structure of an organization thus regulates, coordinates, and reduces uncertainty in the behaviour of people. According to Peter F. Drucker, “Organisation structure is the most important means as a structure wrongly build cannot assist in the promotion of the business”. Thus, the organisational structure is the lifeline of an organisation and this determines the mutual relationship of different persons working within an institution and clarifies the position of each person in it.

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Creation of an appropriate structure is indispensable for any organisation and Organisation structure represents the hierarchical arrangement of various positions in the enterprise and it helps in allocating authority and responsibility formally and it also lays down the pattern of communication and coordination in the enterprise and As Kimball write, “ The problem of an organisation is to select and combine the efforts of men of proper characteristics to produce the desired results”. Although character and type of organization would depend largely on the size and nature of the enterprise, yet, there are certain patterns of organising the personnel in an organisation and the need of clear-cut authority/responsibility relationships has led to different forms of administrative organisation as follows:

1. Line Organisation

It represents a direct vertical relationship through which an activity flows from top to bottom throughout the organization and the quantum of authority is highest at the top and it reduces at each successive level down the hierarchy, every person in the organisation is in the direct chain of command. The line of authority not only becomes the avenue of command to operating personnel but also provides the channel of communication, coordination and accountability in the enterprise.

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2. Line and Staff organization

Under the line and staff organization, the function of line is similar to its function under the line of organisation but some staff or experts are also appointed as advisors to the line officers. The functions of line officer are to take decisions, while the function of the staff officers is to advise them and these staff officers are experts in their respective fields and they offer their useful advice after analysing the problems presented by the line officers and in the way, the work of thinking and execution is done by different persons and this removes the chief defect of the line organisation and it can be adopted in case of large business enterprises. It is, however, important to make it clear that the line officers are not bound to accept the advice offered by the staff officers because the line officers alone are responsible for the outcome.