Five Types of Hierarchies

If you are looking for a new career prospect or if you are starting to find your way in the industry, you might come across specific questions. These questions are the factors that tell what your expectations from the job provider are.

The usual questions are about the desired salary, benefits, progression, or even the kind of boss you might have. But have you stopped to ask the question about the hierarchy of the organization?

It is an often-overlooked question, but considering the changing times and the variety of organizational structures out there, you need to ask this question. Let's first figure out what suits you the best.

Five Types of Hierarchies

1. Traditional Hierarchy:

It is the most common structure, often popularly known as the "top-down" management style. It is based on a 'chain of command' with everyone reporting to their higher-up superior.

 
The issue with it is that it is considered too bureaucratic, with every decision to pass through a line of command. This makes the process time consuming, and the top management has the most say in final decisions. This method is also getting outdated.

 
2. Flatter Organizations:

They are based on fewer layers than the traditional hierarchical companies. Cisco is an example of such an organization. There is some form of hierarchy, but there are open lines present for communication and collaboration. This structure showcases the most common stage of flat hierarchy.

 

3. Flat Organizations:

Valve, a video game developing and publishing company, applies this structure. In this, there are no job titles, seniorities, and managerial division structure.
 
 
4. Flatarchies:

They lie somewhere in between hierarchies and flat organizations and has features of both structures. These are highly dynamic and are thought of
as having no single constant structure. Google, Adobe, Lockheed Martin are among the organizations following this structure.

 
5. Holocratic Organizations:

As the name suggests, with "Holo", meaning "whole" and "cratic" means
"to rule or govern"; it is the rule of all. 

These kinds of organizations are portrayed as boss-less by the media, with the fundamental goal being to enable distributed decision making so that everyone can work on what they do best. It has been experimented by Medium and Zappos, among others.

The Recent Trend of Big Businesses
 
It is a common assumption that merely start-ups and not-for-profit businesses would apply the flat structures, but the big companies are moving towards flattening in the current times. 

The companies employing more than a thousand people previously thought to be hierarchy have decided to move towards flattening at the corporate management level.
 

4 Reasons Why the Flatter Organizational Structure Works
 
The reason behind not only start-ups using this approach but also big businesses moving towards the same is the benefits it brings to the organization. These benefits are:
 

1. No Communication Gap:

Since the flatter organizational structure focuses on getting rid of the middlemen and getting everyone in proximity, the ideas do not get lost traveling along the chain.

2. Quicker Decision Making:

Hierarchical structures are centralized, so most decisions have to wait until it reaches the top decision-making authority. With a flatter approach, things are brought to speed.

3. Increased Productivity:

Employees are motivated to work more if they are intimately involved with the company's decisions. An excellent example would be the "WorkOut" strategy applied by Jack Welch when he was CEO at GE. 

As workers' voices were being heard, and decisions were made swiftly, and
in front of them, the workforce's productivity and job satisfaction increased significantly.

4. Shared Purpose:

With the broad base of individuals at the flat level, there is a greater sense of shared vision and personal ownership of the organization. This, in turn, improves the work culture.
 

Worries With the Flatter Organization Structure
 
The downsides of the flatter structure include, no supervisor to report to, unclear accountability, unclear division of responsibility and unclear career progression paths.

The last one is the primary worry of them all. It has been found in reports (namely, Gallagher's 2018 Organizational Wellbeing & Talent Insights Report) that the potential for career progression is one of the top priorities that job seekers want while looking for a new job.
 
Flatter organization structure sometimes makes the employees believe
that the only way to advance their careers would be to leave the company
for their career progression.

 
Final Questions
 
Now that you know the structure's know-how, the next step is to ask this
question to your potential employer, but mainly to yourself. Which is your working style? Which organizational structure do you prefer? And if you don't know where to start, then start from – Who do I want to be?

 
Written by – Srishti Purohit
 
Edited by – Sandhya R