Running Your Business

5 Corporate Hierarchy Structures to Consider for Your Business

  • Having a successful organizational structure is paramount to creating a better workflow and adding new positions

  • The most commonly utilized organizational structure is a hierarchical one

  • Consider the four other organizational structures: a flattened structure, a flat structure, a flatarchy or a holacracy

Posted by February 5, 2018

Maintaining a formal organizational structure is an integral part of creating a professional environment with clear reporting relationships and well-outlined managerial authority. Additionally, having a successful structure is paramount to creating better workflows and adding new positions.

While the most commonly utilized organizational structure is a corporate hierarchy (where roles funnel upward to one leader), there are several other options for building the organizational structure at a business. Here are five configurations to consider.

1. Traditional Hierarchy

The structure of a traditional corporate hierarchy means that every entity of the business is subordinate to another entity—right on up to a single leader. This is, of course, the model of choice for large corporations looking to create a linear workflow and maintain a strong sense of status quo. If you are looking for a structure where communication and information flow from the top down, this popular corporate hierarchy is for you.

2. A Flattened Structure

A flattened structure looks similar to the traditional hierarchy, except with fewer organizational layers. This allows for greater communication between levels of leadership. While there is still a hierarchy in place, this model encourages collaboration and a better employee experience. If you are looking to make changes to your structure without totally reinventing the wheel, the flattened structure is the way to go.

3. Flat Structure

The flat organizational structure operates on the core value that every employee is equal. Flat structures usually mean there are no job titles or management hierarchy. Employees are expected to self-manage. One drawback to this structure is that hierarchies may develop internally regardless. This type of organization is ideal for small businesses willing to try something radical, knowing that the model may likely evolve as the company grows in size.

4. Flatarchy

A flatarchy combines the organizational structure of a traditional hierarchy and a totally flat company. Businesses may choose to implement a mostly traditional hierarchy with a few flat entities, or vice versa. If your business is looking to introduce an incubator or innovation team with plenty of autonomy, this is definitely the way to do it.

5. Holacracy

Holacratic structures operate so that roles are defined by the specific work that employees are doing. Decision-making is also distributed across the organization. While there is still some sense of hierarchy on the departmental level, this model is extremely transparent. Zappos’ structure is an example of this type of organization, which can be ideal for small- to medium-sized companies looking to decentralize the decision-making process.

There is no one ideal organizational structure for every company. Consider what the goals are in the structuring of your business and decide which model works best for you. You’ll also want to be flexible and open to the possibility of changing the organizational structure as your company evolves.

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