Unless a business is staffed only by equal partners, more than one person means that there are managers and subordinates. A hierarchy describes the relationship between managers and subordinates from the top of the company to the bottom. Except for those at the very top, owners or directors, and very bottom, entry-level, of the chain of command, employees have both a manager and subordinates.
The military is a classic example of hierarchical organizational structure. “An organization in which power and responsibility are clearly specified and allocated to individuals according to their standing or position in the hierarchy,” defines Westburn Publishers Ltd. Ranked employees exist at different levels, one reporting to the other. The basic hierarchy structure looks like a pyramid: each level is in charge of the levels below and reports to the levels above. Organizations with many layers describe a tall hierarchy while those with only a few follow the flat model.
Tall hierarchy structure became popular at the beginning of the 20th century as businesses grew larger and needed to command and control more employees and functions. In the 1990s and early 21st century, globalization and increased technology led to downsized workforces and therefore flatter organizations. The reason being, “while suited to routine and clearly specifies tasks," tall structures, "leave little room for flexibility or initiative,” reports Westburn Publishers Ltd.
Span of Control
Span of control defines the number of people who report to a single manager: the fewer the people, the smaller the span of control. Tall organizations have a large number of managers, each with a small number of people reporting to them resulting in a narrow span of control. Flat hierarchies give a small number of managers a wide span of control over many employees. In a general pyramid shaped structure, the span of control gets wider, the farther you move from top management.
This traditional structure clearly defines each employee's duties and his relationship with other personnel. The line that gives orders and makes decisions follow from top to bottom is called the chain of command. “In a hierarchy the chain of command means that a production manager may be way up in the hierarchy, but will not be able to tell a marketing person what to do,” reports Tutor2u. Insulating each level from those below and above prevents job function crossover, making them strong levels.
Advantages and Disadvantages
In a hierarchy, authority, responsibility and job function are clearly defined, along with the road to promotions. Communication is clear, since it travels directly from top to bottom, so everyone knows exactly what his duties are. Hierarchies organize people into departments and teams that lead to teamwork and motivation. Since decisions have to travel from top to bottom, and communication from bottom to top, hierarchies respond slowly to new information and changes and have a bureaucratic decision-making process. Departments more focused on their own goals than company goals can lead to rivalries and selfish decisions.
- pyramid image by Horticulture from Fotolia.com