Hierarchical teams


When we hear of the word 'hierarchy', we know this is understood as authority and ranking. A hierarchical team represents a company's organisational structure that starts with senior management and executives to cascades through to the rest of the employees. To put this in another way, this structure refers to only one leader and a flow of subordinates underneath them. 

This means that team members are divided into groups and each group reports to a manager who then reports to the CEO. So in a team with multiple levels, the highest rank holds the authority and power is diminished as it flows downwards. These structures exist in many organisations as they have so many benefits. The structure is easy to understand and new teams and functions can easily be slotted in as and when required. 

As a leader, it's important to evaluate the benefits and challenges as well as your company's needs when designing your organisational structure. By designing early and making conscious decisions you can build a sustainable organisation from day one.

Benefits of hierarchical teams

  • A clear career path and promotion - in a hierarchical structure, the team members can progress quicker. This allows them to know that they can go for the advanced positions within the company over time if they acquire the experience. The opportunity for promotion could improve morale, motivation to perform better and, in turn, increase your company's productivity. 

  • Loyalty - numerous departments and teams are very common in a hierarchical structure. This could represent a great benefit for your company because when employees are part of a team, they cultivate team spirit and loyalty. Since everyone works towards the same goal, teamwork and department loyalty can have a positive impact on your company's success. 

  • Clear authority - with numerous levels of authority and power, your employees will report to direct supervisors and this facilitates communication. Rather than having a company with one executive leader, a hierarchical structure allows for better employee management and clearly defined executive positions. 

  • Nurturing expertise - due to a variety of departments, the employees are provided with the opportunity to become specialised in a certain area. When the team members acquire the expertise, they become more responsible and accountable for the success of the department. Also, the specialisation can only lead to higher efficiency and productivity which, in turn, makes a department run smoothly. 

Challenges of hierarchical teams

  • Cost - having multiple departments means having a lot of managers and supervisors. The higher the position, the bigger the cost. This is natural since employees in these positions (hopefully) have more knowledge and experience, therefore, require adequate pay. In other words, multiple layers of management could end up being costly to your business. 

  • Slow decision-making process - the speed of decision making can be slowed down because all manager roles tend to be interwoven when making a decision for the company. The more managers, the harder it will be to get everyone on board with an agreed decision. This could be due to the diverse personalities, differences of opinion, as well as different ideas for the company.

  • Poor communication - dividing employees into different departments and levels has its advantages, but also disadvantages. Where there are so many supervisors, the team members need to get in contact with all of them rather than one sole executive. Moreover, different managers run their departments differently and different rules and procedures might slow the communication process down as it could create a lot of confusion.  

  • Rivalry - in a hierarchical structure, you should expect various employees who are divided into teams, groups or departments with particular strengths. This could influence their desire to make decisions which might benefit their department, but not necessarily the company. A certain department could be in a constant competition with another department and this could damage the company morale and result in a more unfriendly working environment. 

How to lead a hierarchical team

A hierarchical structure can prove to have many benefits for your company as shown above, but also numerous drawbacks. Therefore, it is up to you to create the team that you need to achieve the goals of your organisation. But how do you lead this type of team successfully?


  • Create broad salary brackets or benchmarks for each tier or area of expertise. You need flexibility to attract talent and create opportunity within levels, but also keep some control over budgets.
  • Remember, the more senior levels hold more responsibility and decision making power. Members of this level must develop themselves to own that responsibility and not fall into blame, control and competition.
  • Just because you hold the power, doesn't mean you can't share it. Empowering and delegating to others gives autonomy and accountability. It also helps employee engagement.
  • Remember that regardless of placement on the hierarchy, no person is better or worse than another. Every individual matters and should be treated with respect.
  • Remember that not everyone wants to lead. Subject matter experts and experience are vital for your business to grow. Enable members to develop their careers, so create advancement opportunities that fall outside "climbing the ladder".



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