The organization in production management is a group of people which works under an executive leadership. It divides the work and responsibilities of the employees. It establishes a relationship between authority and responsibility and controls the efforts of groups. The organization is a step towards the achievement of established goals. The following are the various types of organizations :

1. Line organization. It is also called military type of organization because it resembles to olden military organization. Sometimes it is also called as the scalar type since it has straight flow of authority within a single unit. It is the simplest form of organization in which responsibility of each individual is fixed, discipline is strong and quicker decisions are taken. The disadvantage of this organization is that it overloads a few key executives and encourages dictatorial way of working.

The line organization is suitable for small concerns and for automatic and continuous process industries such as sugar, paper, oil refining, spinning and weaving industries.

2. Functional organization. This type of organization was introduced by F.W. Taylor. In the functional organization, the quality of work is better, wastage of material is minimum and specialized knowledge and guidance to individual worker is provided. Through this type of organization is obsolete now-a-days, yet in the modified form, it is frequently used in some most modern and advanced concerns.

3. Line and staff organization. This type of organization possesses practically all the advantages of both the line and functional organizations. In the line and staff organization, the quality of work is improved, and there is less wastage of material, man and machine hours. The expert advice from specialist staff executives can be made use of. This type of organization is preferred for an automobile industry.

4. Line, staff and functional organization. This type of organization has many of the advantages of line and staff organization and functional organization. This type of organization is preferred for a steel industry.