Hierarchy is a method to structure a business with the use of various ranks of experts and a vertical chain of command. It means a straightforward chain of knowledge from the top of the organization to the bottom. Higher levels have the power to control the lower levels of the chain. You can think of an organizational hierarchy structure as a pyramid. If somebody who is at the bottom of this structural pyramid wishes to make a decision, they shall send the request up from the chain of command for sanction, for which a decision will ultimately be returned.
A hierarchical structure functions properly when there are lesser products that are vended in greater volume, so that it’s controlled and preserved over the strategy, quality, manufacture, and supply of goods.
Advantages of Hierarchical Structure
A hierarchical system lets many individuals control every feature of an organization, which has the below benefits:
The whole thing in Hierarchical Organizational Structure looks like to be prearranged and steadied besides it is quite less possible to get power and responsibility messy. All the workers know precisely what designation they are been given along with their responsibilities. To avoid discretion for interpretation permanent rules of intra organization processes and arrangements is set and typically it is written in words. Most significantly, under this structure, aims and objectives are well-defined turning out to be appropriate for every kind of businesses. The objective is pretty clear so that the duties are done on the specific time.
Employees perform well and are motivated when opportunities for promotion are done Hierarchical structures encourage executing employees as experts. They may narrow their field of focus and become experts in specific functions.
Employees working in the company are more expected to have positions that let them become detailed experts. In case their proficiency is used successfully, this means that an enterprise can have many centers inside the organization where best practices are hired.
When it comes to career path there is a clear career path through this kind of organization, with employees slowly proceeding through the numerous stages of management over a good amount of years. Individuals reaching senior level may have built up enormous experience with the company.
Hierarchical structure controls orientation. The hierarchical system works well when just key products are being sold, or there is an important marketing message to be passed on.
Types of hierarchical structure
Here are some of the hierarchical structure types:
The simple structure
This structure is not expanded and is typically practiced in small companies where themanager, as well as the owner, is same. The power of simple structure is that it is quick, flexible and low-cost to maintain and having perfect liability.
Bureaucracy means Normalization the complete procedure. The organization system is considered by extremely routine operating responsibilities attained through specialization, formal rules, and regulations, assembled tasks, central authority and group decision making.
The hierarchical system is known to be completely out-of-date but still, a number of companies that need good control over fewer product lines, continue to function well with this kind of structure.