How to Create a Chain of Command in Business

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In our last blog post, we outlined the need for a hierarchical structure; a chain of command in business that clearly defines where each manager and employee falls within the company hierarchy. By creating a chain of command, you are implementing a structural system of management that gives individual managers and employees autonomy and control over their own area, and that eliminates chaos and confusion so workers don’t get pulled in different directions by conflicting management requests.

The corporate chain of command provides a clear line of responsibility from the executive suite on down. As part of the structure, you need to give employees a procedure to move up the chain if their concerns are not resolved. If they go to their immediate manager with a problem and it is not resolved, then you need to explain who they can go to next, whether it is the HR manager or the company owner, etc. One benefit of a defined chain of command in a business is ensuring that employee concerns are addressed.

Creating a Chain of Command in Business

1. Establish a corporate chain of command from the outset. Every role in the company should be defined within that chain of command (including for the boss) – who the employee reports to, and who reports to them. Set up well-defined reporting procedures, including exceptions where a different manager or protocol is needed. The business chain of command needs to be written down as part of your formal job descriptions.

2. Communicate with the team. A good rapport with the staff goes a long way toward eliminating confusion and any resentment that may arise around miscommunications. Make sure everyone understands the chain of command in your business to eliminate issues in advance.

3. Get buy-in. Make sure that not only does everyone on staff understand the chain of command, but they support it. Without staff support, it won’t succeed.

4. Stay informed.As a boss, it’s your responsibility to know what you employees know, and what they are doing. You should know how to access the same reports, get the same information, and be able to answer any question they might have. That way there is no legitimate reason for staff to break the chain of command looking for more information to do the job.

5. Provide leadership to all staff. As a business owner, it is your leadership that keeps everyone informed about the vision of the company and what they are working towards. Communicate big picture items and rules of the business in staff meetings. Give everyone a chance to comment and be heard. Ask questions to find out what is happening in all levels of your company.

Developing good systems are part of good leadership. By instituting a clearly defined management chain of command in your business, you provide your employees with a system of structure that allows them to make decisions within the scope of their job function and without creating additional chaos for the company.


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