CHAIN OF COMMAND OF A COMPANY: CHARACTERISTICS AND EXAMPLES - DUDAS - 2025

The chain of command of a company refers to the different levels of command within an organization. It starts with the highest position, such as the CEO or the owner of the company, and works its way down to the line workers.

Companies create a chain of command so that instructions flow down and reporting flows up, by providing a supervisor at each level of workers.

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In an organizational structure, the chain of command refers to the hierarchy of reporting relationships in a company, from the bottom to the top of an organization, who should be accountable to whom.

The chain of command not only establishes responsibility, but establishes the lines of authority and the power of decision of a company.

A proper chain of command ensures that every department, job, and task has a person to take responsibility for performance.

characteristics

Each company has a different organizational structure, which translates into its chain of command. The hierarchy of a company begins with the president at the top. Following the president are the vice presidents and senior management employees who report directly to the president.

Then there are the department managers and supervisors, who report to the top-level executives.

Finally, the line workers arrive, who report to their respective supervisors and department managers. All employees recognize the structure of the company when there is a chain of command.

-Management levels

Senior management

They are in charge of the overall performance and health of the company, controlling and supervising the entire organization. They are the ones who establish the goals, objectives and mission of the company.

Senior executives spend most of their time planning and decision-making, constantly scanning the business environment for opportunities and threats. Among her duties are:

- Establish goals and objectives of the company.

- Scan the external environment.

- Plan strategically and make decisions.

Middle management

They are responsible for achieving the objectives established by senior management, developing and implementing activities.

They supervise the line managers and ensure that they correctly execute the proposed activities. Among his duties are:

- Inform senior management.

- Supervise the line managers.

- Assign resources.

- Design, develop and implement activities.

Line managers

They are in charge of supervising employees and coordinating their daily activities. They must ensure that the work performed by their employees is consistent with the plans that senior management established for the company. Some of his duties are:

- Inform middle management.

- Supervise employees.

- Organize activities.

- Get involved in routine business operations.

-Importance for a director

Although most senior executives do not typically interact with line operations, they also need to be aware of everything that is happening in the company.

Managers must especially ensure that their ideas and goals are properly executed and delegated through the chain of command.

Advantages and disadvantages

-Advantage

Responsibility

Having different areas of the business can improve accountability by giving everyone a different responsibility. Everyone has their own separate duties, and their own supervisor to keep them accountable.

Efficiency

A functional chain of command helps improve efficiency when communicating with workers. As a result, this helps them improve work flow and fine-tune their management methods.

Clarity

Having a good business structure makes the chain of command very clear. Also, this lets everyone know what decisions they are allowed to make and which ones need to be presented to their supervisors.

Employee motivation

Companies that have a clear chain of command create an environment free of uncertainty and chaos. This improves worker motivation, leading to high productivity and low employee turnover.

Specialization

By having employees focus on specific functional areas, you can create groups of specialists, which thus strongly impact the functions of the company.

-Disadvantages

When information is available everywhere, a hierarchical order that ensures communication of decisions and information needed by different levels of employees is unnecessary.

The need for quicker decisions and flexibility in a dynamic work environment requires employees to communicate directly with all levels of the company.

It is not acceptable to wait several days for the boss to be available when a customer's needs are not being served or an employee's work is delayed. The employee should be able to talk to his boss's boss, or to the president, or make the decision on his own.

If you want to develop employees who can respond immediately to customer needs, employees must be able to obtain immediate information and make decisions without supervision, to meet those needs in a timely manner.

Jobs are no longer rigidly defined, and the current outlook calls for employee empowerment, authority, and autonomy to make decisions close to where the need for them exists.

Examples

Examples of senior managers include: Board of Directors, Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), President, and Vice President.

Some examples of middle managers are: general managers, department managers, operations manager, division manager, branch manager, and division manager.

Examples of a line manager include the following: department head, foreman, office manager, section chief, shift manager, and supervisor.

ABC company case

ABC is a company that owns office supply stores. Store employees receive constant criticism for being rude and rude to customers, ultimately leading to people choosing to buy office supplies elsewhere.

This can directly affect the company's revenue and, therefore, the director's projections.

A good senior manager should occasionally check on his lower managers to see if they are performing their tasks properly, to prevent problems like this from occurring.

Tip: You should walk across the store counter or on the factory floor at least every one to two weeks. You have to know the people who are dealing with customers or who are producing a product.

They will also unveil the secrets that middle and top management will not tell, or simply will not know.

References

1. The Strategic CFO (2018). Chain of Command. Taken from: strategiccfo.com.
2. Sophie Johnson (2018). Chain of Command in Organizational Structure. Small Business - Chron. Taken from: smallbusiness.chron.com.
3. Susan M. Heathfield (2018). Understanding the Chain of Command. The Balance Careers. Taken from: thebalancecareers.com.
4. Jane Smith (2018). Chain of Command in Organizational Structure. Bizfluent. Taken from: bizfluent.com.
5. Business Dictionary (2018). Chain of command. Taken from: businessdictionary.com.