What does the term 'chain of command' refer to in an organization?

The term 'chain of command' refers specifically to the line of authority that connects individuals within an organization. This concept is central to understanding organizational structure as it establishes who reports to whom, thereby creating a clear hierarchy.

In a typical organization, the chain of command dictates the flow of information and responsibility, ensuring that decisions and directives come from higher levels of management down through the ranks. By having a well-defined chain of command, organizations can operate more efficiently, as employees understand their roles and who to approach for guidance or decision-making.

The other terms listed do not accurately capture the essence of 'chain of command.' The distribution of profits pertains to financial management rather than authority structure, while the method of product distribution focuses on logistics rather than hierarchy. Finally, the team setup for project work relates to collaborative efforts rather than the formal lines of authority that the chain of command represents.