What is the power structure of a company?

What is the power structure of a company? Who holds the most power and what powers do they have? What powers do they not have?

One Response to “What is the power structure of a company?”

  1. Nancy  on November 21st, 2012

    1. An elite group constituted by people holding influential positions within a government, society, or organization.
    2. A hierarchy of managerial authority: sought to advance within the company’s power structure.

    Hierarchial Power Structure
    In a hierarchy, the closer one is to the top, the more power one is perceived to have. Power usually means the ability to give orders, and in a hierarchy power is directed downward through the organization. Hierarchies are traditional organizations and the structure is used by many companies throughout the world.

    Flat And Matrix Organizations
    Many companies today reflect the trend toward “flatter” organizations where past layers of management have been eliminated. It is believed that the resulting flatter organization allows decisions to be made by employees actively affected by the decision, not an executive who is far away from all the facts needed to make that decision. Matrix organizations are also flat. In these organizations an employee may report to several managers, not a single manager as in a hierarchy. Matrix organizations are typically used in companies designing or manufacturing complex products where interaction among several functions is necessary.

    Power Fiefdoms
    Regardless of the type of organization, there is always the propensity for people to create power centers or fiefdoms. These power centers can be created by a single manager or executive or by groups of people. In many organizations, the power structure is not the same as the organizational structure. Knowledge of power centers, otherwise known as the “informal” organization, can help managers and employees alike get things done.

    Power Centers And Organizational Dynamics
    The power centers in an organization can influence organizational dynamics. For example, if the design team has disproportionate power, it can give a thumbs-down vote on product ideas it does not like even though those ideas may have been carefully vetted by the marketing staff. Or, if marketing has disproportionate power, it can insist product development design products not really suitable for the company’s goals.

    Structure And Culture
    An employee, no matter at what level in an organization, must keep his mind on deciphering the code between organizational structure and company culture. The dynamic of the corporate culture is sometimes far more important to understand and heed than are “formal” lines of authority.


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