When you read the term "bureaucratic model," you might think of government. A government agency is a strong example of this term's meaning. A bureaucratic model is a way of organizing people so there are clear reporting relationships from the top to the bottom of the organizational chart.


This organizational model has developed over centuries. A bureaucracy is achieved when a business, nonprofit or public agency has differentiated, or split into different departments. Each department is an important function of the organization. For example, warehouses, logistics, sales, marketing and customer service are important functions of a retail company. Departments might compete for power within the organization.


If you look within departments in a bureaucracy, specialists emerge in each department. For example, an accounting department in a bureaucratic organization has specialists in cash handling, accounts receivable, accounts payable, property, inventory and other specialized accounting tasks. People with more expertise tend to hold higher positions in a department, and usually earn more money for their knowledge and experience.

Vertical Reporting System

For over 200 years and until recently, the bureaucratic model dominated Western societies, including industrial and government organizations. The model depends on a vertical reporting system. In this kind of organizational structure, you can assume the highest person in the vertical reporting system has the most power, and the people lowest in the system have less power.


Decisions must be made through the vertical reporting system. For example, workers at the bottom collect information and pass it through middle-level managers until it reaches top management. At the top, executive managers make decisions and send them back down the vertical hierarchy to the lowest level managers, who in turn share management decisions with their line workers.