Understanding Reporting Relationships in Organizations
An administrative reporting relationship establishes a clear line of authority between positions or units in the organizational hierarchy. The actions of the subordinate are subject to the direction and/or approval of the next higher level of management, irrespective of the autonomy the latter may choose to grant to, or withhold from, subordinate levels. Subordinate positions never report administratively to more than one higher-level supervisor.
Functional Reporting Relationship
A functional reporting relationship establishes a connection between positions or organizational units at different management levels based on the specialized nature of the function for which a mutual responsibility is shared. In this type of situation—often referred to as an indirect reporting relationship—the higher-level position or unit provides functional guidance and support to positions or units lower in the organizational structure.
For example, Human Resources at Headquarters has functional responsibility for the area human resources activities, while these activities report administratively and directly to the Vice President of Area Operations. There is no formal line of authority in a strictly functional relationship.
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