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A pyramid organizational structure is a hierarchy with the executive level at the top and descending levels from middle management to the lower levels of the organization. The idea behind the structure is that each upper level is able to function because of support from the lower portions of the pyramid. This is a traditional system of organizational structure that is often linked with bureaucracy.
The primary concept of the pyramid organizational structure is that the lower levels of the organization follow the commands of top level employees. In essence, the executives control all key elements of the company. This includes strategy, operations, and overall vision.
There are typically three major levels in pyramid organizational structure: executives, managers, and staff. Managers usually oversee specific departments or products and report directly to the executives. Staff supports managers by performing tasks that fulfill the directives coming from the executive level. Some organizations may have an assistant manager level between managers and staff.
Pyramid organizational structure is based on several traditional structures seen in religion, governments, and the military. The development of early corporations tended to follow this structure because it was already established in these other areas of society. While the system continues to be in widespread use, other types of organizational structure have developed in response to changes in society.
A well-executed pyramid organizational structure clearly outlines the precise responsibilities of each employee. The success of the corporation is dependent upon individuals adhering to their assigned roles. This includes obedience to upper level employees and acceptance of the policies they develop.
Workers in a pyramid organizational model have a well-defined structure for career advancement. The common path is to move from staff level to manager and executive. As there are fewer positions in the upper levels of this type of organization, not all employees have the opportunity to reach the top. The condition of an employee who is not able to move above a certain level is often referred to as the “glass ceiling” because the path to the top is clear, but not accessible.
Newer models of organizational structure reject the notion put forth by the pyramid system that the leader of an organization should have complete control over important decision making. They give more responsibility to employees by allowing greater control on a departmental level. This is primarily in response to criticism that executives on the top level of an organization do not have the same understanding of specific departmental issues as the employees who work daily in these areas.