Solution

Hierarchical structures are not designed to deal with change quickly or effectively. Hierarchical Structure:  A hierarchical organization follows the layout of a pyramid. Every employee in the organization, except one, usually the CEO, is subordinate to someone else within the organization. The layout consists of multiple entities that descend into the base of staff level employees, who sit at the bottom of the pyramid. Advantages of a Hierarchical Structure: •           Employees recognize defined levels of leadership within the organization; authority and levels of responsibility are obvious. •           Opportunities for promotion motivate employees to perform well. •           Hierarchical structures promote developing employees as specialists. Employees may narrow their field of focus and become experts in specific functions. •           Employees become loyal to their departments and look out for the best interest of their area. Disadvantages of a Hierarchical Structure: •           Communication across different departments tends to be less effective than in flat organizations. •           Rivalry between departments may inflame as each department makes decisions that benefit its own interests rather than the organizations as a whole. •           Increased bureaucracy often hinders an organization's speed to change. Increased time may be required to respond to clients. •           Salaries for multiple layers of management increase an organization's costs.