In an organization with a hierarchical structure, the employees are given ranks at various levels of the organization. Each level is one above another in a stacked manner. At each level, every manager has a certain number of workers functioning under him/her directly.
A traditional hierarchical organization has senior managers of the company grouped together as the board of directors and are responsible for building various business strategies and give the overall business a direction, whereas the middle managers are responsible for specific functions such as marketing or finances.
Employee Roles and Command Chain
In an organizational structure, “chain of command” is a company’s hierarchy of passage of information, that is, from bottom to top of the hierarchy, who must be answerable to whom.
An employee plays the role he is supposed to work as, under a manager, and work as per the guidelines provided by the manager and as per their skills for which they have been hired.
How is this followed?
The hierarchical structure is followed in an organization where the power and control have to be at every level of the organization and the number of employees is large. Such organizations provide powers to every individual to manage a group of employees under them.
These organizations have a large number of employees working under them and thus need control to be imposed on every individual by dividing the employees into various groups at different levels each managing a group of individuals under them. This makes it very easy for the organization to keep control and exercise power on the individuals.
Advantages and Disadvantages of Hierarchical Structure
The advantages of such a structure can be listed as under:
- The authority and responsibility for every individual is properly defined and clearly determined.
- The promotion paths for every individual is clear. For every employee, they know the level higher to them and know where they will be and their role after promotion.
- There are managers that have their own fields of specialization and can perform well in the field. Such managers can be effectively used for efficient use of their team.
- Such a structure build a culture of loyalty towards their department within the organization. Such a culture instills in the employees, a sense of responsibility and loyalty towards their team and a dedication towards their work.
But, such a structure can also have a few disadvantages as well. They are listed as follows:
- The organization can be bureaucratic and may respond slowly to the shifting requirements of the customers. It may respond slowly to the changes taking place in the markets within which the organization operates.
- Communication within the organization can be poor sometimes, due to their massive size and thus making the horizontal communication difficult as well.
- Departments have the independence of making decisions that may benefit them and not the business as a whole. This may be due to the inter-departmental rivalry or selfish motives of the departmental heads.