Chain of Command

What is Chain of Command?

In an organizational structure, chain of command refers to a company's hierarchy of reporting relationships – from the bottom to the top of an organization, who must answer to whom. The chain of command not only establishes accountability, it lays out a company’s lines of authority and decision-making power. A proper chain of command ensures that every task, job position and department has one person assuming responsibility for performance.

The chain of command is the unbroken line of authority that ultimately links each individual with the top organizational position through a managerial position at each successive layer in between. The concept of chain of command stems from two basic principles: unity of command and the scalar principle. Unity of command means that an individual should have only one boss at any given point in time. The scalar principle states that there should be a clear line of authority from position of ultimate authority at the top to every individual in the organization.

A chain of command is shown in the diagram illustrated below. If decision making in the organization is at higher level of the chain then the organization is called a centralized organization usually small organizations follow such type of structure and if the decision making is at various levels in the organization. In this structure organization is said to be decentralized as many people have an authority of making decisions.

Traditional Chain of Command

The chain of command is a very traditional way of structuring a company's authority levels. It's common to see the same chain of command structure at various organizations, from customer-based businesses to government entities.

A business owner or CEO holds the position at the top of a chain of command because they hold the top position at the company. The next level down usually includes senior executives or individuals who are in vice president roles over a part of the organization. These individuals report directly to the owner or CEO.

Under the upper management level, you may find individual managers or supervisors who are responsible for an entire department or group of employees. These employees would appear under the middle-management level and at the bottom of the chain of command to represent that their authority figure is their direct supervisor. It's also common to find several ways to break down the hierarchy even further, depending on how large a company is, how many departments it has and more. There may be more management levels or fewer, depending on business needs.

The important thing to remember is that the farther at the bottom of the hierarchy your position is, the less authority you may have. Those at the top of the hierarchy possess more control over organizational developments and are in the position to make important decisions. They also carry more accountability and responsibility for the company's success and all the individuals who fall under them in the chain of command.

While there is a traditional structure to a chain of command, you may find the language used in a company's hierarchy to differ from one business to another. Some companies use traditional terms like "superior" and "subordinate" to describe members of a company's hierarchy, while others use "team members," "employees" or actual job titles.

Chain of Command - Historical Background

The chain of command principle is ancient, but its application to the management of organizations was only systematized in the twentieth century. Two individuals—the French engineer and executive Henri Fayol and the German sociologist Max Weber—contributed much to our understanding of this principle. In his book, General and Industrial Management, Fayol presented what have come to be known as the fourteen principles of management. These principles include both the unity of command (his fourth principle) and the scalar chain (line of authority). Fayol's principle of the unity of command holds that a subordinate should report to one and only one supervisor. Fayol believed that this was necessary to provide the supervisor with clear position authority, and to prevent a subordinate from receiving conflicting orders. Fayol's scalar chain principle states that authority and responsibility flow, one level at a time, in a vertical line from the highest level in an organization to its lowest level. This line of authority establishes an organization's hierarchy. Fayol believed that it was a management error to abandon the chain of command for no reason, but he also allowed for circumstances in which the chain of command might be bypassed for the good of the company. For example, Fayol suggested that communication delays might sometimes be caused by blind adherence to the chain of command and unity of command principles, and proposed what he called the "gangplank," which allows communications outside the chain of command as long as superiors are made aware. Weber also studied the problems inherent in large organizations, as organizations grew from family structures to much larger entities during the Industrial Revolution (1760–1850). Weber proposed the bureaucracy as a model of efficient organization. Bureaucratic characteristics have clearly defined hierarchies of authority and responsibility, consistent with the chain of command principle.

The Purpose of Chain of Command

The chain of command serves two purposes:

• Decentralize authority: Since it is extremely difficult for one person to supervise every task personally, assignments are passed down through the levels of command.
• Links the different levels of command: Go through each level of command in your chain of command one step at a time until the problem is resolved or the question is answered.

How Chain of Command Works

In a traditional chain of command, one person sits at the very top. In an organization, this is usually the Chairman or Chief Executive Officer (CEO). Below this person on the second line, you’ll typically find other C-level positions (i.e., CFO, COO, CDO) who are the CEO’s directly reporting staff members.

Moving further down the chain, you’ll typically find regional managers, department heads, mid-level managers, team leaders, supervisors, and, at the very bottom, regular staff members.

At each level of the chain of command as you move downwards, autonomy and decision-making power is diminished. This hierarchical method for organizing power, authority, decision making, communication, and information flow assumes that each level of the organization is directly subordinate to the one above it, i.e., the level to which it reports.

In larger companies, the chain of command is often split into many levels across three distinct tiers: senior management (e.g., CEO, Director, Senior Vice President), mid-level management (Regional Manager, Department Heads, Supervisor), and regular employees who don’t manage other employees.

The Importance of Chain of Command

In companies, hierarchy begins with the president at the top, following by the vice presidents and senior management employees who report directly to the president.

Then there are the department managers and supervisors, that report to the top-level executives. And finally, the line workers arrive. This is just a general delineation, but it serves to give you the perspective.

Though in a business environment there is more flexibility than in military organizations, following the chain of command is of high importance to ensure efficiency in the overall “production process” of the company; without it, there would be only chaos and a decrease in profitability in the medium term.

A proper chain of command ensures that every department, job, and task have a person to take responsibility for performance.

Types of Chain of Command

There are two different types of chain of command, a wide or less chain of command. This means is there are really large chains “wide” or there are smaller ones containing five or less higher heads. For wide chains there are many cons when organizations grow larger more levels of management are added which increases overhead costs, there tends to be a decrease in communication and access between top and bottom levels, as a result this can largely impact decision making slowing down the process greatly, and finally it can also lead to loss of contact with clients or customers. With less chain of command overhead costs are low, there is a lot of communication and access between higher and lower ranks, and decision making is done quickly and efficiently.

Levels of Chain of Command

There are three levels of the chain of command in an organization, such as Top-level managers, middle-level managers, and front-line managers.

• The top-level management consists of a board of directors, CEO, president, vice president, and owner of an organization. Top-level managers control the whole organization. They are responsible for deciding the goals and objectives of an organization. They learn about the external environment, such as a change of technology in the industry, and make decisions for the organization accordingly. They are also responsible for preparing strategies to achieve the goals and objectives of the organization. They give orders to the managers working at the middle-level of management.
• Middle-level managers play an essential role in the organization. They establish communication between front-line and top-level managers. They take instructions from the top management and pass that information to front-level managers. They supervise the work of front-line managers and make sure that work is being done as required and on time. In addition to this, middle-level managers are also responsible for the allocation of resources to front-line managers.
• And the last level of the chain of command in an organization is the front-line managers. The role of front-line managers in an organization is to supervise and control the day-to-day activities of employees working in the organization. They make sure that each employee is completing their work as required and on time. Employees working in the organization take their problems to the front-line managers, and front-line managers are responsible for providing solutions to them. The front-line managers actively participate in the day-to-day activities of the organization. The examples of front-line managers are supervisor, department head, project head, office manager, etc.

Chain of Command Vs. Span of Control

Chain of command and span of control are two important aspects in an organization related to organizational hierarchy. Both terms may be confused as one and used interchangeably due to their similarities in objective, which is to ensure that human capital within the organization is managed effectively. The key difference between chain of command and span of control is that the chain of command refers to the levels of authority in a company whereas the span of control is the number of subordinates a manager is responsible for controlling.

The difference between chain of command and span of control depends on the levels of authority in a company (chain of command) and the number of subordinates a manager is responsible for supervising (span of control). Despite the differences, both chain of command and span of control is designated to achieve a similar objective, which is to ensure that subordinates are held accountable for their duties and can reach their managers when they want to discuss any matters due to various organizational differences.

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:

Marketing Agency
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.

Tech Company
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.

Large Restaurant
In this restaurant org chart template, there are three chains that funnel up to the General Manager, who answers to the Restaurant Owner.

Advantages of a Chain of Command

There are numerous advantages that can come from having a good Chain of Command, including the following:

• Responsibility: Having different areas of the business can improve accountability by giving everyone a different responsibility. Everyone has their own separate duties, and their own supervisor to keep them accountable.
• Efficiency: A functional chain of command helps improve efficiency when communicating with workers. As a result, this helps them improve workflow and adjusting their management methods.
• Clarity: Having a good company structure makes the chain of command very clear. Furthermore, this lets everyone know which decisions they are allowed to make and which ones to present to their supervisors.
• Employee Morale: Companies that have a clear chain of command create an environment without uncertainty and chaos. It improves the morale of workers leading to high productivity and low employee turnover.
• Career Path: It makes it easier to create career paths for employees and track their progress toward their goals outlined in their respective areas.
• Specialization: Making employees focus on narrow functional areas can create groups of specialists that heavily impact the functions of the company.

Chain of Command Challenges

• Chain of command thinking originated in an industrial age when work involved more rote activities, less information, and communication options were limited, Decision making and authority were clearly placed in the hands of a few individuals at or near the top of an organization chart.
• Today's organizations experience a plethora of communication options, more intellectually challenging and information-based jobs, and the need for faster decision making. The chain of command, in many ways, impedes these new organizational options and needs.
• When information is available everywhere, a hierarchical order that ensures the communication of decisions and information needed by various levels of employees is unnecessary to the dissemination of information.
• The need for flexibility and faster decisions in an agile work environment requires that employees communicate directly with all levels of the organization. Waiting several days for the boss to be available is not acceptable if a customer's need goes unserved or an employee's work is slowed down. The employee should be able to talk with his or her boss's boss or the president or make the decision on their own.
• Jobs are no longer rigidly defined and the current expectation promotes employee empowerment, autonomy, and decision-making authority closest to where the need for the decision exists.

See Also

• Organizational Structure
• Organization Chart
• Hierarchical Organization
• Management