Org Design, Org structure, Team structure

The Chain of Command in Organizations

By: Functionly

If you’ve served in the U.S. military, you’re likely familiar with the term “chain of command.” The military structure has a well-defined top-down chain of command that extends from the president of the United States all the way down to new recruits of the armed forces. 

Each person who holds a role in the military is responsible for specific functions and tasks. Depending on the individual’s position, they may report to a line officer or someone higher. No one can subvert the chain of command by attempting to go over their leader’s head; everyone must conform to the organizational structure. 

Companies usually follow a chain of command structure, too. However, following the chain of command rules in an organization isn’t a life-or-death situation like it can be in the military. Instead, companies expect their employees to comply with their organization’s chain of command in pursuit of the company's overarching goals.

soldier-gcfdff3dee_640The military has a strict chain-of-command structure.

Why Is the Chain of Command Important in Organizations?

Here are a few reasons why establishing a chain of command is advantageous for companies.

1. Encourages Simple Efficiency

Companies don’t expand in size overnight. Startup companies begin with a single founder. If the company has financial backing, the founder may hire a few key employees to perform specific tasks.

As the business grows, the founder can no longer oversee every person working in the organization. Instead, additional managers are needed to supervise each department to comply with the company's goals. 

Once the organization grows sufficiently large (over 100 employees), executives oversee department managers and supervisors. 

Organizational structure and chain of command encourage efficiency for businesses. Rather than having a single individual trying fruitlessly to control each role and its output throughout the organization, multiple people are responsible for specific departments and tasks.

Aside from efficiency, the chain of command gives each worker a sense of their place in the business. They know their manager and who to seek help from across departments.

2. Supports All Employees

New employees and people unfamiliar with the working environment often struggle in their roles for a period. It takes time to understand duties and how to perform them. With an organizational chart and transparent chain of command, they know who to turn to when they have questions.

Similarly, more advanced employees who have worked for the company for several years or have significant experience in their roles are usually placed higher on the organizational chart. They are often the first ones that new workers turn to with questions. 

If situations require more advanced assistance, a mid-level worker can approach someone with more seniority for help.

3. Allows for Delegation

Sometimes, people become annoyed when asked to handle new responsibilities they aren’t used to. If the request comes from someone on the same level, they may be rightfully irritated. After all, employees usually have a lot to do; why should they accept tasks from someone who isn’t their boss?

However, if the request to perform additional tasks comes from someone they report to, they’re more likely to take responsibility with fewer questions. The employee understands their duty to comply with their manager’s requests. They'll let their boss know if they don’t feel like they can handle the assignment.

Delegation is also essential in situations where someone isn’t available to handle their regular workload. If they’re out on vacation or need to attend an appointment, they can let their manager know when they will be away and ask permission to delegate responsibilities that can’t wait during their absence. 

4. Provides Clarity and Accountability 

If you were to ask yourself, “Who is responsible for marketing in my company?” you’d likely think of the sales and marketing department. Maybe you’d think of the CMO or the VP of sales. 

The chain of command provides a clear-cut outlay of everyone’s place within the company. By simply looking at the chart, you’ll be able to tell where each person fits in the business, what their role is, and to whom they report. 

For instance, if you’re wondering who to ask about the following year’s financial budget, a financial analyst or finance manager can probably help.

5. Creates a Guideline for Communication

When communicating within the organization, you’ll need to know who you can appropriately email for help and who you shouldn’t. It’s acceptable to email your boss or colleagues for assistance with a sales presentation for a client, but contacting the CEO of a 1,000-person organization is not going to earn you any brownie points.

The chain of command provides guidance on who is responsible for what and where they fall in the company. New employees benefit the most from organizational charts since it’s difficult to remember the names and titles of everyone they meet in their first days of work.

Organanizational charts can help employees understand the chain-of-command in their company.


What Are the Disadvantages of a Chain of Command?

Despite the obvious efficiency of a chain of command, it does have some downsides.

1. Potentially Hampers Innovation and Creativity

While a chain of command certainly clarifies any questions related to responsibility and accountability, it may potentially dampen innovation and creativity. 

No matter where a person falls on a chain of command, they still have their own thoughts and ideas. Sometimes, a new outlook on an existing process results in effective changes that benefit a company.

However, if an employee shares an idea with their boss and the manager dismisses it, a potential change that may have improved processes or brought new sales to the business may be gone forever. Even worse, a competitor may think of the same idea and implement it, resulting in lost sales or efficiencies.

2. Doesn’t Fit the Needs of All Organizations

Some companies don’t use the typical top-down organizational structure. Instead, they select a flat or matrix form. Companies that use a flat organizational structure seek to make everyone feel they have something to contribute. Everyone must work hand-in-hand with others, and there is no defined boss whom workers report to directly.

Organizations with a matrix structure use multiple team leaders to oversee employees. Rather than a single person overseeing a department, there may be supervisors, team leads, managers, and directors. In addition, some leaders may manage several different departments simultaneously, allowing for greater communication between divisions.

3. Isn’t Always Efficient

Despite efficiency being one of the most substantial advantages of a chain of command, such a structure can prove inefficient in certain circumstances. For example, if an immediate decision is needed, a chain of command may require a stamp of approval from multiple supervisors before it is finalized.

For example, suppose that a sales department has just obtained a big win. The customer they’ve won over can potentially boost revenues by $1M annually. However, the client needs their services delivered within 30 days. The average timeline for service delivery is 90 days. 

While the sales department would love to promise the customer delivery within their needed time frame, they can’t do so without the approval of the service delivery department and IT. Thus, they have to reach out to multiple people in a short period. 

Unfortunately, the inefficiency of the chain of command slows down the process, and the customer ends up making the same deal with a competitor. In this case, the chain of command proves inefficient when time is of the essence.

How Does the Chain of Command Relate to Span of Control?

Chain of command and span of control may seem similar, but they differ. 

The chain of command defines who reports to whom and outlines the major players of an organization. 

On the other hand, the span of control refers to the number of workers one supervisor is responsible for. A single supervisor may oversee one, five, or even twenty workers who are all considered to be at the same level of the organization. 

Long chains of command in multi-layered organizations may mean a smaller span of control, while flatter organizations may have a much larger span of control.

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At Functionly, we understand how organizational structure changes as your business does. Functionly provides companies with the tools to design their organization according to structural and strategy needs. To learn more about our services, visit Functionly today.

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