What Are the Advantages & Disadvantages of Hierarchical Structure?

by Eric Dontigney; Updated September 26, 2017

Organizations both large and small require structure in order to operate and meet the organization’s goals. One of the approaches to solving this problem is to use an hierarchical structure. Hierarchical structures tend to resemble pyramids, with the highest levels of power and authority at the very top. Governments, militaries and many corporations employ this type of organizational structure. This method of assigning position and relative levels of power provides advantages and yields disadvantages.

Advantage – Clear Chain of Command

In an hierarchical structure, members know to whom they report and who reports to them. This means that communication gets channeled along defined and predictable paths, which allows those higher in the organization to direct questions to the appropriate parties. It also means that individuals tend to know who does and does not possess the authority to assign or change tasks. A clear chain of command also generates clearly defined sets of responsibilities. Military structures rely heavily on this division and assignment of responsibility and authority to maintain discipline.

Advantage – Clear Paths of Advancement

Most people want to advance in their careers. Hierarchical structures offer very clear, if not always easy, advancement paths. In business organizations, for example, advancement frequently means replacing a departing or advancing superior. Alternatively, it can mean moving from one company to another to take a better position in a similarly structured organization. In either case, those seeking advancement know the next step.

Advantage – Specialization

Larger organizations must manage a variety of diverse tasks, ranging from human resources and accounting to marketing and purchasing. The hierarchical structure divides these areas of concern into various department configurations that specialize. Specialization allows organizations to concentrate particular skill sets and resources to achieve maximum efficiency.

Disadvantage – Poor Flexibility

Hierarchical structures tend to adapt slowly to changing needs. Governmental organizations, for example, frequently come under fire for maintaining layers of bureaucracy that inhibit change. Organizations that cannot adapt to new market demands or advancing technologies in pace with or ahead of other organizations often end up marginalized. This problem affects enough organizations that an entire field of study, called change management, has developed.

Disadvantage – Communication Barriers

The success of an organization often depends on the quality of internal communication within it. As hierarchical organizational structures tend to channel communication vertically, interdepartmental or inter-agency communication suffers. Departmental specialization can lead to communication barriers when no shared jargon exists that allows members of different departments to communicate on the same level. In worst-case scenarios, departments purposefully withhold information from each other.

Disadvantage – Organizational Disunity

In theory, organizations pursue a goal or goals as a unified team. The departmentalizing of specializations leads, in some cases, to decisions made to benefit a department rather than the organization goals.