Hierarchical vs. Adaptive Organizational Structures

Lesson Transcript
Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

How does an organization's structure impact the organization? In this lesson, we'll look at hierarchical and adaptive organizational structures, including what they are and some key benefits of each.

Organizational Structure

Youssef is the owner of a growing consulting firm. As his company expands, he wonders whether it's best for all of his employees to report up a chain to him or if it's better for people to work in teams that are more horizontal, rather than vertical.

Basically, Youssef is wondering about organizational structure, or the way a company is organized. Organizational structure centers on the chain of command, or who employees report to. However, organizational structure has an impact on much more than simply the chain of command.

To help Youssef understand organizational structure and its impact on companies better, let's take a look at the two most common structures: the hierarchical model and the adaptive model.

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  • 0:04 Organizational Structure
  • 0:50 The Hierarchical Model
  • 2:16 The Adaptive Model
  • 4:13 Lesson Summary
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The Hierarchical Model

In every company Youssef has worked at, people have had a chain of command that means that every worker has a boss all the way up to the CEO. This is the hierarchical model, or hierarchical structure, of organizations, and it's the more traditional one.

As the name suggests, the hierarchical model is based on a hierarchy. That is, everyone reports to someone who is above them in the company. If Youssef, as the owner, has several executives who report to him, and they each lead a team of workers who report to them, that's the hierarchical model.

Oftentimes in the hierarchical model, each team is like a silo that specializes in something. For example, Youssef might have a customer service department that focuses on keeping current customers happy. He might also have a sales team that focuses on bringing in new customers. These two departments, while similar, may have very little contact with each other. Instead, the customer service reps report to the head of that department, and the salespeople report to the head of the sales department. The managers of each of those departments then might report to Youssef.

The major benefit of the hierarchical model is control. By having everyone report up the chain, the ultimate decisions made lie with the person at the top of the organizational chart, in this case Youssef. The end result is that there's a strong system of control that allows everyone to know who to talk to and who makes which decisions.

The Adaptive Model

The hierarchical model is what Youssef knows because that's what he's always been exposed to. But he's heard that there's a different type of organizational structure, too, and wonders if it might be worth exploring.

An alternative to the hierarchical model is the adaptive model, or adaptive structure. This is when companies are organized horizontally rather than vertically. In an adaptive model, instead of everyone reporting up a chain of command, people work in teams that don't specialize.

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