understanding business hierarchy

Understanding Business Hierarchy In Today’s World!

To most things in life, there are different layers and structures, understanding business hierarchy is just another set of levels that you should familiarize yourself before you get started. You can get a general idea from the descriptions in this contributed article. Read on.

Who Does What? Understanding Business Hierarchy

Starting a new business is a steep learning curve. You’ve got to learn how to do all of these different things like filing taxes, paying employees, marketing your products etc. but one thing that people often forget about is understanding business hierarchy in today’s world.

The structure of a business is something you need to understand if you’re going to create one, otherwise, you’ll lack organization and you won’t be clear on exactly what you should be expecting from each of your employees. If you aren’t sure exactly who does what, read this quick guide to business hierarchy.

various levels in a business understanding business hierarchy

Shareholders

At the very top, you’ve got the shareholders. Most people have heard the term shareholders in movies and TV shows but a lot of us are left thinking, what does a company shareholder do?

We all know that they’re at the top of the pile but a lot of people aren’t quite sure whether they’re the same as the CEO or whether they have any say over the running of the business.

In short, a shareholder is somebody that owns a certain share of a company. They receive profits from their shares every year, as long as the business is making money. As far as their role in the running of the business goes, it’s fairly minimal day to day. The shareholder’s job is to choose who is running the company, which brings us to our next group of people.

Top Level Management

These are the people that are put in charge of running the company by the shareholders. The shareholders themselves are also considered to be a part of this group but they have less to do with the day to day running of the company.

Top level management includes people like the CEO (Chief Executive Officer) and the CFO (Chief Financial Officer). They are the people that decide on the overall direction of the company and they have final say on any major decisions made by the company. Everybody else answers to them.

Middle Managers

The middle managers are the people that are put in charge of implementing the vision created by the top-level management. The CEO usually chooses these people, often consulting the shareholders in the process. You probably know middle managers better as regional or general managers.

They are often called middle managers because they’re not the people in the office doing the day to day work, they’re the people that act as a go-between from top-level management to the day to day workers and communicate the company vision to them.

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First Level Managers

The first level managers are the ones that most of us have experience with. The person that manages the office and works directly with the employees on the day to day tasks that keep the company ticking over. They take their orders from the middle managers and pass it on to employees.

They have the least decision-making power but often have the most important role because they’re the people that are directing the actual running of the company. They are the ones that will be missed most if they disappeared.

That’s the basic hierarchy of a company that you should be using when starting your own business. It should be the basis to help with your understanding business hierarchy as you get started. All the best!

Images courtesy of Pixabay and Pexels.

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6 thoughts to “Understanding Business Hierarchy In Today’s World!

  • Orion

    A short and sweet article you have here Michelle, and you are right, understanding the hierarchy of business is important to be understood by both business owners and employees.
    When you know your place you know what to expect from others and of yourself.
    Wishing you $ucce$$ – Orion

    Reply
    • Michelle

      Hello Orion,
      Thanks for stopping by. Yes, so well said. Hierarchies in business can be a confusing thing, so glad that you were able to ‘sail through’ this article with a little clarity. All the best.
      Michelle

      Reply
  • ariel

    Hello Michelle, seems like the world is so full of hierarchy. No matter where we turn. I am also hoping for consensus instead lol And I do understand that in business this is the current model. I just wish that everyone counts and gets paid well.
    Great breakdown.
    Thank you
    In peace and gratitude, ariel

    Reply
    • Michelle

      Hello Ariel,
      Thanks so much for your visit and your thoughts. Yes, you are so right…all these levels et al. It can be so confusing sometimes, and yes, in the end, it really would be nice if we ALL just get paid! Yeah.
      All the best.
      Michelle

      Reply
  • Tara

    Excellent information on the business hierarchy. This breaks it down nice and simple for anyone who may be curious or want to know who does what. I am embarrassed to say it took me awhile to realize that the manager is above my supervisor – which would be most like the first level manager in your description. Now that I have that figured out it certainly helped me to put who does what in order at my work 🙂 Thanks for sharing.

    Reply
    • Michelle

      Hello Tara,
      Thanks for your visit. Your comment made me smile. Yes, sometimes the whole ‘hierarchy’ system and levels can prove confusing, so I am sure you are not alone in any way. Glad that it ‘worked’ out for you and that you are able to implement the knowledge in your business. All the best.
      Michelle

      Reply

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