Typical Positions in a Business Hierarchy Explained

Hierarchy is a part of every business. It might differ based on the size and model of the business, but there is a basic structure that usually remains the same. Hierarchy is a key element of a business because it helps make the right business decisions and lets people know of their goals and objectives within an organization. Here you can have a look at the basic hierarchy of a business.

The Shareholders

These people own the business. They might not get involved in how the business is run, but they control which direction a business should move. They often influence the decision of the CEOs and other top-level executives.

Board and Advisors

Every business usually has a board whose members give direction to the CEO and usually pass the inputs shared by the shareholders. Outside advisors who can give unbiased advice are often a part of the board of a company.


The Chief Executive Officer runs the entire business and makes most of the business decisions. The Chief Operating Officer, the COO, usually helps the CEO run the show and reports to the CEO about  operational issues. If something wrong happens in a business, the CEO is usually blamed, and the person must fix it or step down.

President and Vice President

The people in these roles don't get their hands dirty with operational tasks. They just supervise different departments and ensure everything is run smoothly. They usually command the department heads and ensure that the department heads are doing their job right. The VPs and Presidents also manage big decisions and ensure operational issues are quickly resolved.

Departments Heads

As the designation name suggests, people in this role head a department and manage the employees working in their division. For instance- a Department Head of Marketing Department will oversee, approve, and implement all marketing activities deftly. They are the bridge between the CEO and the employees and often have to make big decisions to keep things going smoothly in their departments. They work as per directives of the COO, CEO, Presidents, and VPs.

Managers, Supervisors, and Team Leaders

People who take up these positions handle the chores like assigning tasks to employees and ensuring that every task is done on time. They also hire new people, train them, and manage them daily. They also have to take care of terminations or layoffs. They work with base-level employees and are in constant contact with the employees.

Employees/ Contract Workers

Employees are usually the people whose supervisor assigns a task, and they complete it as per the guidelines and within a specific timeline. They are dependent on the supervisors, managers, or team leaders to get the tasks and only usually work for compensation and some benefits. Though they do a lot of hard work, employees usually don't have any power to make big business decisions. 

Some companies use independent contractors or freelancers instead of hiring full-time employees to save money. The independent contractors don't need a benefits package and will work as per their schedule. They also get lower pay than the regular employees. 

Are you looking for more? Check out this interesting Glossary.



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