Hierarchical structure of a company: what it consists of, its advantages and disadvantages

Hierarchical structure of a company: what it consists of, its advantages and disadvantages

The hierarchical structure of a company is also known as a pyramidal structure, and it´s a type of organizational distribution that consists of limiting the different levels of subordination and  control of a Company based on the responsibility and decision making – power of the people that are part of each height .

 “The companies organize their human resources based on structures in order to guide workers and achieve the goals that are proposed”

This structure is based on the principles of classical theories and to this day it is still the most widespread in public and private companies due to its easy application. In addition, small and medium companies are governed by this model for the ease and speed with which with they manage to design and implement their structural organization chart. Even so, in recent years, this organizational model begins to disappear from some innovative companies that pursue success by establishing new structures and they say they know to take advantage of the benefits of the workers.

 Advantages of the hierarchical structure of a company

The most used organization model offers many advantages to companies. The main ones are the following:

1. Authority

This structure leaves no room for doubt. As the pyramid grows narrower, the managers of the company appear with their clear and well – defined functions, and all the staff of the organization knows who supervises the work of each level and who is responsible for the business decisions. At the top, the manager or maximum representative of the company responds for all employees.

2. Specialization

In larger organizations, it is difficult for a few people to control all the areas in which the company is involved, so the hierarchical structure of a company allows to divide the work in large  departments in which the pyramidal structure is re – established to continue taking advantage of the benefits of its order.

3. Promotion

The workers who are part of the hierarchical structure of a company know perfectly what is the next rank to achieve in the organization, which makes it easier to keep staff motivation high.

Disadvantages of the hierarchical structure of a company

The companies that are organized based on this structure highlight some disadvantages:

1. Rigidity

Adapting to new needs can be a slow process in companies with hierarchical structures. And is that when all decisions fall on a person or a very small team, the agility is lost. This rigidity makes that some measures of change are delayed and may cause the company to be marginalized in today’s frenetic market

 2. Communication

 Dividing the work into departments makes that communication between the members of the company is not completely fluid and causes the concerns of some to be alien to others and vice versa.

 3. Disunity

Form large departments with new internal pyramid structures can make workers lose connection with the company and start working looking for the success of the department itself, which sometimes may not share the same goals of the organization

It´s important that all the companies find their ideal organizational structure and, from its application, establish the basis of the work in order to achieve success.

Success is not achieved only with special qualities. It is, above all, a work of constancy, method and organization”

 J.P. Sergent

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