Business Department Hierarchy

Business department hierarchy refers to the hierarchical arrangement in an organization which helps it to undertake a wide variety of activities by delegating the organizational tasks among various departments with apt specializations.

The business department hierarchy helps an organization to figure out the ways for integrating and coordinating the tasks in an organization. A business department hierarchy of any organization is depicted by its organization chart.

The business department hierarchy indicates the degree of differentiation, or in other words to what extent the activities of an organization or business are specialized. For example, one company may have production department, a quality control department and an engineering department while a similar organization may have few more departments; like research & development department, planning department etc., along with the above mentioned basic departments to enhance its degree of specialization.

The major emphasis of departmentation is the delegation of authority, responsibility and resources. Along with the delegated authority, a co-extensive responsibility also gets delegated to the concerned professional. In departmentation, the related activities which can form semi-independent units are converted into departments.

There are no hard and fast rules as how departmentation should be executed and every organization takes the liberty to form its departments as per their convenience. The departments are formed with the sole purpose of achieving specialization in each facet & aspect of the organization’s work. Every organization slices its total business activity into work units as per their requirement and therefore departments can be based on a variety of basis.

To develop a department hierarchy in an organization few major aspects are required to be considered like responsibility allocation, division of companies, tasks & relationship that will prevail among various departments etc.

Although various departments exist in an organization at the same horizontal level of the business department hierarchy, but all departments execute quite similar hierarchical structures in their arrangement. Following are the major levels of department hierarchies observed in business organizations:

Business Department Hierarchy

Business Department Hierarchy

  • Senior Policy Framing Department
  • Senior Managerial Departments
  • Functional Departments

The senior policy framing departments deal with formulating the organizational goals, policies, vision and mission statements; and senior managerial department employees are responsible for implementing the organizational goals by connecting them with the day to day tasks of the functional department employees.

Along with the above mentioned vertical hierarchies, all the departments also observe their individual structural hierarchies where each department is sub-sectioned in various specializations in order to create effectiveness and efficiency. Following are few examples of sub-sections of general departments found in the organizations.

ABC Corporation

CEO / President / Managing Director

Vice PresidentFINANCE Vice PresidentMARKETING Vice PresidentHUMAN RESOURCE Vice PresidentOPERATIONS





Risk Analysis



SalesMarketing Planning & StrategyMarket Distribution Control 

Customer Relations & PR



StaffingOrientationTraining & Development 

Industrial Relations


Salary Administration

ProductionResearch & DevelopmentMaintenance 

Quality Assurance


Production Planning


Production Control

Time Keeping


Material handling



Operation Level Employees