Dotted-line principle

from Wikipedia, the free encyclopedia

In business organization theory, the dotted line principle denotes a division of technical and disciplinary subordination. The term comes from the fact that technical instruction relationships are shown as a dashed line (dotted line) in the organizational chart .

In the business literature, the dotted line principle is mainly discussed in the area of ​​the organization of controlling . As the company grows , it is likely that the controlling tasks will not only be performed by a central controlling department, but that decentralized controlling departments will also be created. If the decentralized controlling or the area controllers are subordinated to the central controlling in technical and disciplinary terms, there is a risk that they will be perceived as a foreign body ("spy of the headquarters") in their area, which leads to a low level of acceptance and possibly also to an information blockade can. The advantages of a close relationship with the head office are the independence from the line authority and the fact that there is a certain degree of uniformity in controlling. In the case of technical and disciplinary subordination to the division manager, acceptance in the line is high, but there may be a lack of objectivity for line activities and the neglect of uniform corporate standards. The dotted line principle is a compromise between these extremes.

Literature & sources