Even in a business environment in which organizations are shifting to work teams instead of vertical chains of command, there are still advantages to structuring a small business to be run from the top down. The biggest consideration in choosing a traditional organizational structure -- the vertical hierarchy -- is whether it enables the owner and employees to meet customer needs effectively. If the answer is yes, it is not necessary to choose a team model, a matrix structure or another flexible structure.

The Traditional Model

One way of looking at how a traditional organizational model looks is to consider the "Mom-and-Pop" operation. In this model, an owner-manager runs the business and adds employees in a flexible model; workers perform jobs that support the service or product delivery model. The degree of vertical hierarchy, or top-down management style, that might be present in a small company is dependent on the owner's personality and management style.


A small-business owner must bring on more help as a business grows. At first, this might take the form of adding part-time staff, such as sales and clerical support. As the business expands, it becomes necessary to formalize the jobs of each employee within a centralized command-and-control structure. If the owner cannot do every job himself, he must delegate some functions to other workers. The benefit of formalization is that the worker roles are not formalized until business growth demands it.


As the business grows, an owner must determine what operational areas she wants to keep control of. She might prefer to keep control of finances or remain as the lead contact for customers. The decision will depend on her skill set and how she decides to delegate some management duties. The benefit of staying with a command-and-control model over time is that the owner only delegates oversight functions as desired and keeps the rest of them for herself.

Simple Accountability

It takes a different kind of leadership to coordinate work teams than is required to run a command-and-control model. Leading teams may be beyond the skill set of an owner or require too much time and energy to implement. Even though employees might like working in teams, they should have some understanding of a vertical hierarchy. It has the advantage of clearly defined roles for each worker and increasing accountability as one climbs the ladder of authority. Workers learn how this works in school and in traditional organizations such as the branches of the U.S. military.