Organizational Structures

Updated: Feb 21

What are the different types of organizational hierarchies/business structures?

An organizational hierarchy shows the chain of command, with the different levels describing who is in authority in the organization's management. The hierarchy is shown in a business organizational chart that shows the organizational structure, describing the management's span of control in the organization.

A flat structure would indicate a wider span of control as there would be many subordinates reporting to a single manager but shorter chain of command, enabling quicker decision-making.

If the organization structure is tall, the management would have a narrow span of control, as each manager have fewer subordinates to supervise, but longer chain of command. Decision-making may take a longer time as many layers of management in the hierarchy needs to be consulted. However, with delegation, more decisions and task can be assigned to employees within the chain of command.

What must an organizational chart have?

The organizational chart must clearly show

  1. Which manager is in-charge of which department/functional unit,

  2. What does each department specialize on, and

  3. Who is responsible for any specific task, function, project, product, customers, region, department or team

  4. How are information or decision-making escalated or communicated, and

  5. Who is responsible for making those decisions