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What Is Corporate Hierarchy?

An organizational chart of a company's corporate hierarchy.
A CEO is usually the head of a company.
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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 16 September 2014
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Corporate hierarchy describes the type of power structure in place in an organization. Often, the term corporate hierarchy is used in reference to the way the different positions and the organization under consideration are arranged from the lowest to the highest on the organizational ladder. Most companies usually follow a similar format meaning that they usually have a Chief Executive Officer (CEO) at the helm of affairs followed by a deputy and other identified positions within the organization as necessitated by the type of industry and the aims of the organization. Some companies also have a chairman who serves as a sort of figurehead in terms of the operation of the company. In most cases, such a chairman might be the owner of the business who hired the other employees to run the business on his or her behalf.

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As mentioned before, the acknowledged lone figure at the top of the hierarchy is the CEO of the company, who may have one or more deputies or vice presidents as the next set of people in the order of the corporate hierarchy. One really interesting factor in corporate hierarchy is the fact that the employees who form the lower rungs are much more numerous and their positions are not as specialized or human capital intensive as those above them, meaning that the structure of the corporate hierarchy starts to thin out the closer it gets to the top as those numbers are much less. For instance, the CEO is one individual followed by a deputy or several deputies, followed by other people in the corporation who have been placed in positions that are just below that of the deputies.

The determination of the exact placement of individuals in the hierarchy depends on the particular industry and the type of company. For example, the type of corporate hierarchy in a steel production plant will differ substantially from the type of corporate hierarchy in a law firm, if only in the description of the individuals who make up the corporate ladder and their duties. The law firm could have a senior partner or partners, followed by junior partners, associates and so forth, while the steel plant might have a CEO followed by a vice president, the general plant manager, etc.

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