What Is a Management Pyramid? (And Other Types of Management Structures)

It is not a stationary relic I’m talking about. I’m referring to the newest extinct animal on the block: the traditional management pyramid. The time has come to dismantle it and switch to a new, unstructured, evolutionary model that makes use of the team effect to make sure that businesses can lead change rather than lag behind or play catch-up.

It might be helpful to go back a bit to illustrate my point. Around the early 1900s, the management pyramid as we know it started to emerge. The Industrial Revolution and the World Wars were two significant factors that influenced the classical (traditional) management school of thought.

The Industrial Revolution brought the issue of management along with it, and the Wars brought the resolution. Every war had a general, a leader who oversaw and commanded everything. The traditional organizational structure, also known as the Management Pyramid, was created by him having “managers” who reported to him, who in turn had several “assistant managers” reporting to them.

Things were fairly straightforward back then: families were blended, manufacturing was the hot topic, selling wasn’t a particularly difficult process, people were straightforward, and “top-down” management worked well. The traditional ideas of the person and his workplace were gradually undone as change crept in. It introduced the nuclear family after releasing the joint family. In an increasingly individualized era, even the nuclear family structure started to deteriorate over time. No matter their age, everyone had a dream they wanted to pursue and looked for their place in the (real or virtual) sun. Fathers and sons found common ground, friends gained power, and strict parental supervision started to wane.

This called for an overhaul of the classical management structure. But that was not to be; within the confines of an antiquated management pyramid, the traditional management “command-and-control” structure persisted and is still in use today. And this outdated management approach undoubtedly does not foster an environment where employee teams can succeed.

Change, then, is the order of the day. And, when change sets in, this pyramid will get deconstructed. The ‘Me’ command will turn into the ‘We’ control. The emphasis will be on collective success rather than personal glories. The focus will be on a flexible, seamless workplace rather than one-stop ordering.

Business models have to change. There are 22 players in a football game, but only one is in possession of the ball at any given time. The other 21 are forming a configuration. The open-ended structure we are in is not about the person holding the ball; rather, it is about how the other 21 people are arranged.

Every forward-thinking company needs to conduct a reality check on its ability and willingness to destructure in order to adapt to the new business ecosystem of the twenty-first century. So, do we have the wisdom to see our organizations as collaborative, evolving life forms that must adapt to the marketplace? Do we have the humility to put aside our egos and give our subordinates the opportunity to speak? Do we have the courage to restructure an established, rigid system that we have previously found to be effective?

Pyramid Principle® Explained

Benefits of pyramid structure for management

Some of the main advantages of a pyramid structure for management include:

What is a management pyramid?

An organizational structure known as a management pyramid, also known as a hierarchical structure, places one leader at the top with progressively larger tiers of management teams below them. You can picture the structure of these organizations as having a pyramidal shape. Each tier of management is accountable for the tier below them. Employees work more closely with the managers immediately above them than with the person in charge who oversees everything. It is the duty of each level to communicate the goals or instructions of those who are directly responsible for them.

Disadvantages of a management pyramid

Listed below are some negative aspects of this management structure:

Other types of management structures

Other types of management structures that you might encounter in a company include the following:

Flat structure

There aren’t many levels of management in a flat organizational structure, also known as a horizontal structure, at a company. Instead, employees take on more individual responsibilities. You can speak directly with the CEO of your company rather than reporting to a manager above you. Additionally, you are more likely to work in a leveled, equal manner with other employees.

Even though this type of management structure can promote open communication and teamwork, it can also make it difficult to determine who is in charge of what. Although you may encounter this structure at many start-up businesses, it can be difficult to keep up as a business grows.

Functional structure

Because there are more employees at the bottom and fewer high-level managers at the top, a functional structure resembles a pyramid quite a bit. The primary distinction between these two management structures is that, depending on the demands of the organization, a functional structure divides into numerous smaller pyramids. You might, for instance, have a pyramid for the marketing department and another for the finance department. Each pyramid is based on employees skills and responsibilities.

This structure offers employees the chance to become experts in their field of work, which benefits businesses. Teams are able to concentrate on their own tasks and get to know their immediate coworkers better. This structure’s flaw is that it can obstruct communication between various departments. Employees might start to care more about their own departments than the big picture objectives of the company.

Matrix structure

A matrix structure, which resembles a grid and is more flexible, is a form of management. Even though some employees might have routine tasks, this type of management structure is centered on projects. Who reports to whom is primarily determined by projects, so employees’ duties and tasks may change as they begin a new project.

Employees can demonstrate their skills and areas of expertise thanks to this management structure. Additionally, it’s advantageous for workers who prefer using their skills in novel ways as opposed to repetitive tasks. This structure has a number of drawbacks, one of which is that it can be difficult to keep up with management changes. In order to avoid confusion, managers must learn how to work together effectively.

Divisional structure

Each division in a divisional structure functions as a separate subset of the overall entity. Each division has its own operations, systems, and resources instead of collaborating with the other parts of the business. Large corporations often have this organizational structure because it gives each division more freedom and control. Depending on the type of market, product line, or location, you might see various divisions.

Large corporations can benefit from the personalization this structure offers. Instead of one large company attempting to meet consumer demands everywhere, a particular subsection can concentrate on a market. The lack of coordination between resources and the potential for a company to work against itself are two drawbacks of this structure.


What is a management pyramid?

An organizational structure known as a management pyramid, also known as a hierarchical structure, places one leader at the top with progressively larger tiers of management teams below them. You can picture the structure of these organizations as having a pyramidal shape.

What are the 4 levels of managers?

The Management Skills Levels Pyramid
  • Bottom Level – Knowledge Management.
  • Level 1 – Project Management.
  • Level 2 – Employee Management.
  • Level 3 – Personal Management.
  • Top Level – Leadership.

What are the benefits of management pyramid?

Most organizations, however, still have four basic levels of management: top, middle, first line, and team leaders.
  • Top-Level Managers. Top-level managers, also known as top managers, are the organization’s “bosses,” as one might anticipate.
  • Middle Managers. …
  • First-Line Managers. …
  • Team Leaders.

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