According to management experts Paul Hersey and Ken Blanchard, choosing the best leadership style depends on the people you manage and the situations you face. To achieve success, match your leadership approach to the maturity of the group members and type of tasks you assign them. Set up a hierarchical organization if your employees lack experience or skills and need guidance from their superiors. On the other hand, use a non-hierarchical structure with decentralized authority when your employees have the expertise to get the job done without much direction.

Hierarchical Leadership

In a hierarchical organization, leaders organize subordinates into a pyramid-like structure. At the lowest level, less-experienced employees take direction from supervisors and managers at higher levels. Communication typically flows from the top to the bottom. Most decisions tend to be made by leaders at the top with little or no input from employees at lower levels.

Hierarchical Leadership Structures

Implementing a functional structure allows you to establish a clear chain of command. You direct each functional department, such as marketing, engineering, sales or support, to develop their own plans. Each plan aligns to the company’s overall strategic goal. Decision-making tends to take a long time, because there can be many layers of approvals required to take an action. In large companies, leaders might organize employees into divisions that perform specialized activities. Each division has its own functional departments. In a matrix structure, you designate cross-functional roles and responsibilities to enable cooperation and collaboration between the divisions. Leaders tend to use the autocratic or transactional leadership styles in managing a hierarchical organization. They do not seek input from employees to make decisions or set the strategic direction. This can lead to decreased employee job satisfaction and lower morale.

Non-Hierarchical Leadership

In a non-hierarchical organization, you divide your subordinates into teams based on the needs of your current work. By eliminating layers of managers, you speed up decision-making and lower administrative costs. This approach works well when employees have the skills and knowledge to complete job tasks with very little intervention from management.

Non-Hierarchical Leadership Structures

Instead of a pyramid-like structure, non-hierarchical organizations typically focus on tasks. In this type of organization, such as a network structure or cross-functional team, you focus on organizing the work itself first, not the employees. Then, leaders delegate authority to the specialists performing the work. This typically leads to increased levels of job satisfaction because employees have a high degree of autonomy and sense of empowerment. You also may contract work out to business partners and third-party vendors to lower overhead costs. This decentralized approach provides flexibility and financial advantages but may result in unpredictability and risks if suppliers fail to meet obligations.