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Business organizations are complex and contain multiple leadership structures. Niels Pflaeging defines the three distinct organizational systems that all businesses must leverage and identifies their strengths, weaknesses and potential outputs. Business leaders and managers who want to understand the organizational structures within their company should read this article.

In this summary, you will learn

  • How every organization has three distinct leadership structures that effect – among other metrics – productivity, and
  • How structures of leadership and influence can create value within a business.

About the Author

Niels Pflaeging is the author of Organize for Complexity. He founded the BetaCodex Network and was a director with the Beyond Budgeting Round Table.



Three leadership structures exist in every organization:

  • “Formal Structure” – In discussions about business leadership, most people talk primarily about the hierarchical structure, which is visible on traditional organization charts. Authority flows from one leader at the top down through an expanding pyramid of responsibility. Organizations that pay attention solely to this form of leadership can become too rule-based, which can stifle creativity, efficiency and productivity...

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