As businesses grow in size and complexity, owners can delegate management of day-to-day operations to lower-level administrators so they are able to focus on working toward long-term goals. Over time, companies can develop hierarchical management structures with several levels of management between average workers and the chief executives. A long chain of command can introduce various problems and inefficiencies into a business.


The likelihood of miscommunication increases as a company adds more levels of management. When a business is just starting out, the chief executive may interact directly with low-level employees, which limits chances of a misunderstanding. On the other hand, when directions are passed down through several levels of management, the directions might change due to different interpretations made by each manager. A hierarchical structure can also introduce uncertainty as to where each manager and subordinate fits into the chain of command.

Reaction Time

The ability to react quickly to opportunities, threats and problems that arise can help a business maximize profits. A long chain of command can dull a company's ability to react and change. For instance, if a low-level employee identifies security flaw in a computer system but that information has to jump through several hoops to come to the attention of a manager who actually has the authority to address the issue, it gives the problem more time to cause damage.


A bureaucratic organizational structure with many levels of management can increase business costs without significantly increasing output. Supervisors and mid-level managers tend to command higher salaries than ground-level workers, so it can be expensive to keep many levels of managers on the payroll. In addition, managers may spend most of their time dealing with administrative issues and micromanaging employees rather than actually contributing to the production of goods and services themselves.

Lack of Collaboration

A company with a long chain of command tends to consist of many relatively small, specialized work groups who all have different supervisors and higher-level managers. This can lead to the formation of cliques and a lack of communication and collaboration between employees. For example, a manager might only ask those directly below him to provide input for a decision, even if employees working under other managers or in related business areas might also have useful ideas to contribute.