Analysing The Traditional Hierarchical Business Model

Traditional, hierarchical leadership styles are practiced in the majority of businesses worldwide, and these can be seen to create transactional employees, who function on a reward and punishment basis. This may be the established norm but is it really the model that can achieve the best working conditions and business outcomes for everyone?

I believe that studying this model of leadership reveals quite quickly that transactional employees tend to attain a basic level of input and commitment to the business and then do not invest further. This is logical, since the social context of diminished worth or punishment prevents effective functioning of the brain. We begin to feel that we need approval to earn a reward or recognition, to assure continued employment. This is a stressful way to live and work, and cannot create empowering business relationships.


Why Is Traditional Leadership So Damaging?

  • The power balance within a hierarchical business model sees the leader holding all of the authority and responsibility in the organisation, motivating workers through rewards and punishments. This is designed as a means to control subordinates rather than develop the most productive working environment, and it is, therefore, seriously limited.
  • Employees within a hierarchical business model do not feel valued by their organisation. They are not encouraged to develop high expectations, or have any responsibility for decision-making, and they are not facilitated in building good relationships to enhance commitment to the company.
  • Traditional hierarchical setups function to repress employees within the system, leading to an automaton-like workforce as the projected ideal. In his 2004 book Emotional Intelligence and Working With Emotional Intelligence, Goleman states that impulses develop when ‘some emotional reactions and emotional memories can be formed without any conscious, cognitive participation at all”.
  • Research suggests that existence solely within the reward/punishment environment can cause changes in the brain, with the perceived threat of this system leading to faulty and impulsive fight or flight responses. This suggests that this type of business model will lead to serious implications for the whole life of the employee and the world around him or her.


The effects of the traditional, hierarchical business model are damaging and have a profound effect that is not just restricted to the business itself. The good news is that this is not the only way, and even the most entrenched business setup can be re-framed and developed to work in an equality-based manner that will empower employees and revolutionise business success.


Developing Your Business For Success

Kieth Deats is a specialist in Equality-Based Practice and has committed his lifetime’s work and doctoral practice study to addressing equality at every level of society as a practitioner. He is driven to enable this with individuals, teams and leaders. He currently partners with peer practitioners and entrepreneurs, working to develop frameworks that introduce and integrate Equality-Based practices and management actions to update and evolve their enterprises. The goal is to sustain and increase rates of growth, with a determination to see each other’s success and the well-being of leaders and their organisations as a priority for Modern Enterprise.

Kieth is available to give talks, and enable the design and implementation of Equality-Based Practices in your own settings, and is contactable via