Corporate Organizational Hierarchy

To execute planning, actions are to be organized by establishing suitable structure and organizing resources. To run the organizations well, one has to take great care to manage the resources, and the top priority is always given as to how to organize humans in the organizations. Work can be done better, if it is divided and done in a concentrated manner, than everyone doing everything at their free will. Therefore, the best way adopted by most of the organizations to organize their employees and their responsibilities, was the adoption of corporate organizational hierarchy in the organization.

The corporate organizational hierarchy in an organization refers to the structured approach of arranging the people within the organization on the basis of the work performed and responsibilities undertaken. For easy process of work in an organization, the activities which are related must be grouped together in departments. Hence, the departmentation is the clubbing of closely interlinked functions. One organization, depending on its size and nature of business can be divided in this kind of structure which is majorly known as hierarchical structure.

Hence, we can say that hierarchical structure is the step by step connection of the top authority to the lowest level employees through sections, departments and divisions.


The advantages of hierarchical structure are that they help in creating a clear communication system from the top to the bottom or from bottom to the top level. In the system hierarchy this results in improvement of coordination and motivation among the employees. Hierarchies are also responsible for creating departments and then forming teams from the departments which enhances motivation and streamlines the tasks under individual departments.

But there are certain disadvantages also, of this corporate organizational hierarchy. The disadvantages of hierarchies are that hierarchies are difficult to adjust & are inflexible. Especially when there is need to adapt to the changing trends in the market. Hierarchies result in the formation of the departments which is more for themselves and less for the greater good of the organization.

Corporate organizational hierarchy structures involve many people and hence it is very important that each person at each level understands his role and position well. The role and responsibilities are pre-defined when it comes to hierarchical structures of corporations.

The board of directors of a company is the committee formed on the behalf of shareholders to direct business and its management as such is called board of direction. They are a part of management and it must be said that management requires ownership interest to find inconsistencies in it working, face difficulties to overcome these and interest in the task that they are performing.

The functions that a manager performs include supervising operational activities to make sure that they are in sync with the organizational objectives.

Employees contribute towards the growth & development of the organization by being active in the implementation of business activities. They get returns in terms of wages, bonus, and perquisites. Employees draw their sustenance from the organization expenditure and are also contributory to the organization’s income by their efforts.