An Introductory Guide to the Corporate Chain of Command [+Examples]
If there’s one management process that can foster collaboration, innovation, productivity, job satisfaction, and more, it’s a well-designed and thoughtfully implemented chain of command.
A chain of command describes who employees should report to and when they should consult their supervisor with project decisions. Not only is it part and parcel of a company’s hierarchy, but it’s essential to creating an efficient and enjoyable work environment for your employees. The right chain of command can make employees feel supported, respected, and excited to contribute new ideas to the company.
This guide covers the basics of the chain of command so you can better incorporate the process into your organization’s hierarchy and org chart design. We’ll cover:
- The importance of the chain of command
- The hierarchy of common corporate titles
- The advantages and disadvantages of the chain of command
- Examples of the chain of command in business
The Importance of Chain of Command
Every member of your company is at a different point in their career and has different levels of experience. A chain of command provides support to less experienced employees so they can feel confident enough to suggest innovative ideas and develop their skills.
A chain of command also creates a culture of collaboration and an environment of physical and emotional safety, all while protecting the company from unnecessary risks.
A company in any industry, whether it’s software or construction, likely has or needs a chain of command in order to operate at its best.
The Hierarchy of Corporate Titles
Many large businesses and organizations are split into three tiers: senior management, middle management, and regular employees. Any additional tiers, and the chain of command may become too complex to work efficiently.
Common corporate job titles include:
- Chief Executive Officer (CEO)
- Chief Operating Officer (COO)
- Chief Financial Officer (CFO)
- Chief Marketing Officer (CMO)
- Chief Technology Officer (CTO)
- Chairman of the Board
- Vice Chairman
- Vice President
These are the individual contributors who don’t manage other employees, such as financial analysts, HR generalists, or sales reps. Their titles and specialties tend to be industry-specific. It’s worth noting that the smaller the business, the less likely it is to have distinct tiers, as employees take on multiple roles to help the company reach its goals.
Chain of Command Advantages
A clear chain of command promotes:
- Responsibility – Everyone knows what they are accountable for.
- Clarity – At any given time, employees know who they report to and which decisions need their managers’ approval.
- Job Satisfaction – Employees who work in stable environments experience less stress and more productivity.
- Efficiency – The decision-making process happens in a predictable manner, while the chain of command itself can highlight any potential redundancies that slow down workflow.
- Career Goals – Upper-tier jobs give employees clear career goals to work toward.
- Specialization – Employees can focus on what they do best and develop skills relevant to their interests and career goals.
Chain of Command Disadvantages
Implemented thoughtlessly, chains of command can create:
- Reduced collaboration – Employees may feel confined to their department and resist sharing ideas or project decisions with people outside their division unless their managers invite them to do so.
- Slow communication – Decisions have to travel up the chain of command, then responses must travel back down, which can slow projects to a crawl.
- Reduced innovation – Employees whose ideas are frequently shot down by risk-averse managers may be hesitant to share potentially innovative ideas in the future.
- Internal competitiveness – Managers may feel territorial over their employees or decision-making power, creating an environment of competition and distrust.
Examples of Chain of Command in Business
The exact chain of command will depend on your company’s industry and what duties are essential to running the business, but these examples should help you get started:
The above is an organizational chart for a marketing agency. There are multiple chains of command, each grouped by division, with three levels in each. Individual contributors report to their director, who in turn reports to the CEO.
The org chart example for tech companies above shows two chains of command within the sales division. Both the Sales Manager and the VP of Sales have employees who report to them, and they in turn report directly to the Chief Revenue Officer, who reports to the CEO.
In this restaurant org chart template, there are three chains that funnel up to the General Manager, who answers to the Restaurant Owner.
Create Your Company’s Chain of Command
When you design a chain of command with the intention of supporting employees at all levels of your org, you start to build a culture of clear communication, efficient workflows, and mutual respect. The key is to think critically about which roles are best equipped to serve and guide the team at each tier, and to not overburden the chain with more layers than are absolutely necessary.
Looking for more org chart samples? Check out Pingboard’s templates, which are based on data from thousands of org charts in multiple industries.blog comments powered by Disqus