What is a Common Corporate Hierarchy?

At companies, there are often discussions about climbing the corporate ladder. But what exactly does that mean, and what does that ladder look like for employees at different levels? The corporate ladder refers to an employment hierarchy of career advancement in which entry level positions sit at the lower levels and the scope of responsibility and leadership increases as the levels ascend. In this guide we will explore what a common corporate hierarchy looks like so you can better understand where you sit and how you can rise up in your own organization.

What is an organizational structure?

Organizational structures can easily be confused with a corporate hierarchy. While they go hand in hand, there are crucial differences between the two. An organizational structure is a system used to define and outline how work flows throughout the organization, what groups work together and who reports to whom. These structures are visualized using an org chart, a diagram that details the roles, relationships and rank of a business.

There are three main types of organizational structures: hierarchical, flat and matrix. Hierarchical is the most traditional structure and closely resembles the pyramid chain of command we associate with a common corporate hierarchy. On the other hand, the flat structure and the matrix structure showcase operations utilizing a horizontal flow of authority.

What is a corporate hierarchy?

According to Investopedia, the corporate hierarchy can be defined as “the arrangement and organization of individuals within a corporation according to power, status, and job function.” Organizations use this structure to standardize the levels of responsibility and clearly convey the chain of management. Although many corporations and professionals no longer feel the need to conform to a traditional hierarchy, every business still has some form of a reporting structure that displays how management and responsibility is distributed, even if they have less levels of hierarchy.

For an establishment to work successfully, leaders must determine what organizational and reporting structure best supports the operational needs of the business. While a flatter hierarchy is an exciting environment for some, many find that the traditional pyramid structure allows for more clearly defined responsibility, authority, career paths and leadership. Let's unpack the groups of professionals that constitute the rungs of a conventional corporate ladder.

Levels of hierarchy

C-suite:

At the top of the pyramid is the C-suite, also known as the C-level, aptly named because every job title in this stratum begins with “chief.” The highest echelon one can reach in an organization is the Chief Executive Officer, as every other member of the C- suite and the entire organization reports into them. The executives that make up the C-suite are directly responsible for governing their respective departments by leading the strategy and decision-making. Common positions seen in the C-level include:

  • Chief Operating Officer
  • Chief Technology Officer
  • Chief Marketing Officer
  • Chief Financial Officer

Read more about the CEO and all of the executives who report to them. However, as the future of work continues to change the C-suite is evolving with it. Today, we are seeing job titles such as Chief Remote Officer and Chief Diversity Officer increase in popularity. Here are the C-Suite Titles to Watch in 2022.

Upper management:

Below the C-level is the leadership team, who are the managers of managers. This rung of leaders is responsible for more closely running the area of business they head up by delegating responsibilities to the team below them and providing supervision. Depending on the size of the organization there can be multiple levels within this rank. Some of those positions include:

  • VP or President
  • Head (Such as Head of People and Culture or Head of Finance)
  • Senior Director or Director

Middle management:

In the center tiers are the middle managers — typically the first layer to go when a company is considering reorganizing into a flatter structure. Managers oversee small sections and teams of a department, balancing both hands-on work and the supervision of their direct reports. They ensure that project goals and deadlines are being met, hold their team accountable and offer guidance. Usually they will have “manager” or “team lead” in their title.

Entry level:

At the lower levels of a corporate hierarchy are the entry-level positions. These employees are professionals with fewer years of experience who work as individual contributors (ICs), meaning they handle tactile tasks and have no people management responsibilities. Though they rank lowest in the corporate ladder, these individuals contribute significantly to the goals of an organization and the work that gets done daily.

There are a number of positions within this bracket that differentiate depending on the field they sit in, but ICs can typically be identified by words like associate, assistant, coordinator, analyst, specialist or trainee in their job title. There are often still promotions within the entry level, where employees' titles are advanced to a title such as “Senior associate” or “Software Engineer II.” Although the scope of influence and salary might increase with a promotion, an employee at this level would still not take on management responsibilities.

Board of directors:

Remember when we said everyone reports into the CEO? Technically that isn’t always true. There is one tier that sits above the C-level: the board of directors. While every enterprise does not need to have a board of directors, only public companies are required to have one. This elected group of governors and trustees play a major role in the direction of an organization. The board represents shareholders, sets corporate management and policies, makes high-level decisions and has the power to hire or fire the CEO.

Visualizing your corporate hierarchy

Whether you’re early in your career or already at chief status, familiarizing yourself with the structure of a business hierarchy is helpful to better understand the management chain, growth trajectory and lines of communication. For a visual of where you sit in your organization's structure, add yourself and your corporation to our community of public org charts.

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