Different types of structures serve as the basis for the operation, organization, or coordination of enterprises. These are matrix, divisional, functional, hierarchical-functional, and hierarchical structures. In this article, we focus on the advantages and roles of hierarchy in business.
Corporate hierarchy: role
Among the different organizational structures, hierarchy is the most widespread and best known in business. It is based on a principle called one command, which states that orders given to an employee must come from a single superior. In this mode of operation, there is one member of the organization who is above all others.
Description of the hierarchical structure
To better visualize the concept of hierarchy, it must be assimilated to a pyramidal organization chart or simply to a pyramid. At the forefront of the latter is the leader, the director, or the boss of the organization. Then some employees are prioritized based on their experience, authority, or level of responsibility within the company.
Thus, employees or managers come directly after the director in the ranks of employees. The remaining company members find themselves completely at the base of the pyramid. Indications or orders move from the top down in the hierarchical structure.
In other words, employees receive orders or indications from managers who also receive them from the boss of the company. This is called top-down communication.
In addition, it should be noted that the hierarchy model adopted by companies has evolved considerably over the years. The notion of bottom-up communication is gradually becoming established in organizations with hierarchical structures.
Thus, for the well-being of the company, employees can also send information or ideas to the director through managers. For this, several means are put in place. For example, an employee can share their opinions via a trusted platform of employee reviews to contribute to the progress of the company.
Importance of hierarchical structure
An organizational structure contributes to the management of a business on many levels and in different ways. Its choice also depends on several factors such as:
- the type of business;
- the target to be achieved;
- the number of employees;
- the activities to be carried out;
- the area where the company is located.
The role or importance of each model is also to be taken into account for better management of the company.
The hierarchy makes it possible to distinguish the position, rank, and functions of each person within a company. This contributes to improved coordination and communication between internal staff. In other words, the role of each employee within a company based on the hierarchical model is carefully defined in advance.
Nowadays, hierarchy brings up topics such as participatory management: advantages and disadvantages that involve the development of hierarchical relationships between employer and employees. This strengthens collective intelligence when it comes to finding solutions that are more beneficial to all.
Corporate hierarchy: advantages
Generally, an organizational structure allows a company to achieve its objectives more efficiently. Thus each of the organizational models has its advantages and disadvantages. The advantages of hierarchy are numerous and contribute to the good of the entire company.
Clear and well-defined organization
One of the first advantages of the hierarchical model is the clear and well-defined organization that prevails within the company that adopts it. Responsibilities and positions are well defined through an organizational chart. Staff members are most often represented by rectangles or circles. Some companies add photos and even staff contact information.
The employees listed at the bottom of the organization chart know directly who to contact in case of potential problems. The work is therefore done more easily and without misunderstandings when everyone performs their duties correctly.
However, it should be noted that the hierarchical structure highlights HR issues in 2023. These include, for example, employee motivation, internal communication, and quality of life at work.
Competency-based recruitment
In a company based on a hierarchical organization, employees are recruited for specific skills sought by the company. Each staff member knows their objectives and is obliged to carry out their role well.
In small companies focused on structures other than hierarchy, employees can be recruited to focus on several projects at once. These may not fit with their training. Productivity is then impacted.
Opportunity to climb the ladder
In a hierarchical structure, employees have the opportunity to progress from the grassroots to higher positions. Thus, they get an increase in grade, but also in salary income. To climb the ladder within a company, you need to have the right skills and certain qualities such as leadership. Seniority also plays in favor of obtaining promotion.
Mastering the culture of the company can also allow an employee to stand out among their colleagues and gradually make a place at the top. Hence employees or collaborators need to know it. The essential components or elements of corporate culture are values, objectives, history, rules, or cohesion in the workplace.
Team cohesion
The hierarchical structure reinforces internal cohesion although many people think otherwise. Indeed, employees involved in this operating model work on common missions, so they are grouped and create bonds. They get to know each other over the time they spend together.
In addition, in case of difficulty creating a link, here are the steps to follow for team cohesion:
- build a common history between employees;
- encourage exchanges to foster a healthy environment;
- give specific instructions to each team member;
- Create moments of sharing or relaxation between staff.
It should be noted that cohesion at work increases the performance of team members. It also eliminates much of the stress that some employees may experience at work. In the absence of stress, the employee can reach their full potential and can achieve all their goals very quickly.
More human-centric management
Hierarchical companies have a developed notion of the challenges of good HR communication. This is why they use a more personal management that is closer to the employees, especially if it is a large company. Indeed, the employee who encounters a problem knows directly where to turn to hope for improvement. This saves the company time.
Business stability and efficiency
Corporate hierarchy refers to the notions of stability and efficiency. Following guidelines or knowing in advance your goals to achieve speeds up the work. The origin or cause of errors is best traced by identifying the source of the execution order. This allows the problem to be resolved quickly and the company’s productivity to be improved.
Hierarchy in business: creation
The organizational structure allows a company to achieve its objectives more efficiently. But before that, it is first necessary to succeed in its creation and implementation in the company. In the hierarchical structure, an organization chart is a tool that allows one to visualize the hierarchy present within a company. It also highlights the functional links that exist between the members of the organization.
The person with the highest position within the company is automatically in the highest place on the organizational chart. In some cases, this person corresponds to the general manager of the company who is therefore at the head or the top of the pyramid. Then there is the president and vice president whose roles are separate from the CEO of the organization. Department chairs, managers, supervisors, and finally employees complete the hierarchy structure in a specific order.
After designing the organizational structure of your company, find tips for managing your e-reputation and communication on online sites dedicated to this. The management of the e-reputation makes it possible to transmit a good image of a company on the internet. It also helps attract a large number of customers to the company; thus increasing its level of income. In addition, it would be better to use marketing and online communication professionals. These specialists will be able to set up a good process for managing your reputation on online sites or social networks.
