The traditional hierarchical structure may not work for every business. Operating with a top-down framework that includes a chief executive officer, managers, supervisors, team leaders and employees can actually keep your business from operating smoothly. You don't have to imitate the structure of a large corporation to make your small business seem legitimate; choose one that works for you. Before you build a hierarchy that may be hard to dismantle, understand the drawbacks that could keep you from growing.

Slow Communication

People in hierarchical structures tend to want to approve communications as they pass up and down the hierarchy. This can cause delays and confusion. A manager may not get to an email for several days and may then offer an opinion or place a restriction that kills the communication altogether. The sheer amount of time a directive can take to reach employees from the head office can cause costly delays. For example, if your company needs to ramp up production to get ready for a new customer, employees may not begin the increased production for days or weeks after you issue the order.

Lack of Autonomy

In a rigid hierarchy, the people who deal directly with customer problems may have the least authority to solve them. The higher on the rung the manager is, the more distance she may have from the customer. The rules of a hierarchy require that higher-ups approve decisions, and this can mean that people in the field or at the front counter may not be able to move quickly to respond to customer needs.

Interdepartmental Rivalry

As departments grow in size, they often begin to compete with one another. This can result in decisions that benefit the department but not the company. For example, if the production department decides to slow down to focus on quality, the sales department may be left without products to sell. Other conflicts may not be so direct. Departments may simply compete for bigger budgets based not on need but on pride, and you can end up funding projects that don't serve your business.

Dependency on Strong Leaders

A hierarchy cannot operate effectively if a leader near the top is weak. Poor decision making at the pinnacle of the hierarchy can lead to inefficient actions clear down the chain of command. For example, if a CEO ignores business risks, he may increase borrowing for expansion. Departments might spend more to take advantage of the influx of cash, while the company might be ignoring the threat of an unanticipated competitor. The resulting drop in sales could mean the company is unable to pay its debt. The weak decision maker who overlooked the risk would have led his followers into disaster. A less hierarchical structure might have allowed other managers to raise objections in time to correct the course.