Organizational structure is a system that consists of rules and policies to outline work roles, responsibilities and reporting relationships, and how they fit within the overall system.5 A visual representation of an organization structure is an organization chart. It shows the tasks or major activities and how employees and tasks are grouped, the line of authority (who people report to) including the flow of communication and the levels in the hierarchy. A simple organization chart for a manufacturing firm is illustrated in Figure 6.1. It shows an organization chart with four departments where the tasks are grouped by functions (Sales, Production, Finance, and HR). The sales department is further divided into three groups that focus on geographical location of customers (Asia, North America and Europe).