Chain Of Command In Small Business

Posted on Jan 6, 2022
By Kerry Anne Nelson
8 min read
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Having grown up in the military, with my dad working his way up through the ranks of the Australian Army throughout my childhood, I am very familiar with the concept of the Chain of Command. Have you ever heard the saying “up the chain”? Well, that saying comes from this idea.

Chain Of Command In Small Business

“The chain of command in small business lets everyone know where they fit, and how they can get help if they need it.”

Traditional chain of command structure

Webster’s Online Dictionary defines this concept as “a series of executive positions in order of authority”. In business, the way indeed.com editorial team describes this idea in a blog article shows us more about how valuable it is. They say the Chain Of Command is “the structure of an organization’s reporting relationships.

It conveys the hierarchy of authority, meaning that the more responsibility you have within an organization, the higher your position within the chain of command.”

When people talk about going up the chain, they’re referring to a higher-up authority in the organization.

In other words, the Chain of Command allows each person in the organization to understand who supervises who, and who is responsible for leadership, instruction, and daily management.

The reason this idea is especially valuable in business is that it allows people to more clearly understand where they ‘fit’, and how the different roles work together to keep things going. They can see how their role works with their supervisors, and then how their direct supervisor relates to others in the team.

What are the challenges of having a chain of command?

The problem with the concept is that it’s a little offensive to many. Business owners typically value their freedom, and they like to think their team can enjoy a certain amount of freedom too.

There are very few people who run their business like a small army. Most avoid that kind of authoritarian control in favour of more people-centred approaches. It’s with pride that business owners try to give their team members a sense of autonomy and ownership within the business.

This is especially true for owners running a remote team. There are no limits to the flexibility that can be arranged when people are free of a physical workspace.

I am very much like that too. I love making my business work to suit the preferences my team members have for their lifestyles and ways of working. But beyond the offence of the military context, there is value in the Chain Of Command idea that is worth taking a brief moment to explore.

What is a flat chain of command?

A flat chain of command is where there are very few, or no levels of hierarchy. The further you move up the organizational structure, the fewer people report to you.

The leadership team might have a dozen or so direct reports, while a director might only have two or three. As you can see, this quickly becomes quite a horizontal structure.

There are several reasons why a business might choose to go with a flatter chain of command

The first reason is that it can speed up decision-making. When there are fewer people involved in the decision-making process, things can move more quickly

The second reason is that it can create a more collaborative environment. We will go through these in more detail below.

What is a vertical chain of command?

A vertical chain of command is the traditional hierarchical model where each level of the organization reports to the one above it.

In a vertical chain of command, there are clear lines of authority and responsibility. There is a clear sense of who is in charge, and who needs to be consulted on decisions.

The advantages of a vertical chain of command are that it can create a more efficient decision-making process, and it can give employees a clear sense of their roles and responsibilities.

Chain of command advantages

Improving team efficiency

When people know who their direct supervisor is, and who is responsible for leadership and instruction, it can improve team efficiency. There is a clear sense of accountability, and people are more likely to follow instructions if they understand the chain of command.

This can be especially helpful in large organizations, or in teams that are spread out geographically, and/or run remotely.

Clear goals & direction for staff

Another advantage of having a clear chain of command is that it provides employees with a clear sense of purpose and direction. When people know who they need to report to, and who is responsible for different areas of the business, they can more easily set goals and achieve them.

This can lead to a more motivated and productive workforce, as employees feel like they are working towards something, and they have a clear understanding of their role in the company.

Outside understanding

When you have a clear chain of command, it can be easier for people outside of the organization to understand how it works. This can be helpful if you are working with contractors, or if you are selling products or services to customers.

If people know who they need to talk to in order to get things done, it can make the process more efficient, and it can create a better overall experience for everyone involved.

Structured responsibility

A clear chain of command can also help to create a more structured sense of responsibility within an organization. When people know who is responsible for what, it can lead to a greater sense of accountability, and a higher standard of work.

This can be especially helpful in businesses where there is a lot of customer interaction, as it can help to ensure that everyone is aware of their responsibilities, and that they are meeting the needs of the customer.

Chain of command disadvantages

There are, of course, some challenges that come with implementing a chain of command in your business. Let’s take a look at those now.

Collaboration becomes difficult

One of the main disadvantages of having a structured chain of command is that it can make collaboration more difficult. People may not feel like they’re in a place to make suggestions or offer ideas if they feel like they need to go through their supervisor first. This can lead to silos within the organization, where people are reluctant to share information or work together on projects. It can also make it more difficult to resolve conflicts, as people may be hesitant to approach someone who is higher up in the hierarchy.

Employees feel less empowered

Another downside of a chain of command is that it can make employees feel less empowered. If people feel like they need to always go through their supervisor, or that they don’t have the authority to make decisions, it can lead to frustration and resentment. This can lead to a disengaged workforce, and it can make it difficult to retain good employees.

Delayed communication

Another potential challenge of having a chain of command is that it can delay communication. If people need to go through their supervisors, or if there are multiple levels of management, it can take a long time for information to filter down. This can lead to problems with decision-making, and it can make it difficult to respond quickly to changes in the market or the needs of the customers.

Risk of stagnation

Finally, one of the risks of having a chain of command is that it can lead to stagnation. If people are reluctant to share ideas or challenge the status quo, it can be difficult to innovate and grow as a business. This can put you at a competitive disadvantage, and it can make it difficult to adapt to changing market conditions.

So should you have a chain of command?

I would absolutely suggest that you have a chain of command; how you go about it is another story though. Make it clear, but be mindful of the pitfalls there can be through having a chain of command that is too rigid.

If you can imagine taking the military uniforms off the idea, the Chain Of Command can show the relationships in the business useful for team members to access support, reward, and acknowledgement.

If the Chain of Command is not clear in the business, it can be difficult for a new hire to know where to get help when they need it. If there is a problem to be solved, and the lines of supervision and responsibility are not apparent, that problem will stay unresolved for a long time.

Opportunities for acknowledgement and reward will be consistently missed if team members don’t know who is in their direct care, and performance issues will be left without a proper management response if leaders don’t work to train and nurture their direct reports.

Quite simply, remote teams can work most effectively when they know who to take their questions to, how to get help when they need it, and the best pathways to follow when there’s a problem.

When lines of responsibility and accountability are clear, teams can be trained, instructed, supported, and rewarded properly.

Kerry Anne Nelson

About Kerry Anne Nelson

Kerry Anne Nelson is the founder of Operation Verve and is a qualified first-class Honours graduate with more than 8 years of experience in education.

Kerry Anne Nelson is a workplace processes architect and uses her Lean Six Sigma training to maximise her years of experience in business management, education, and team leadership to help clients achieve lasting business growth.