Organizations vary in two important ways: size and degree of hierarchy. Organizations can be very small (like a five-person start-up company), or enormous (like an international conglomerate with a workforce of thirty thousand people). Small organizations tend to be more informally organized, while larger organizations depend on greater standardization of policies and procedures. Organizations also vary in terms of the degree of hierarchy. In nonhierarchical organizations, there is no power differential between members. An example of this would be a cooperative or a Quaker religious community. In these entirely nonhierarchical organizations, decisions are made by consensus only. The decision is not made until the entire organization comes to agreement.

Hierarchical organizations organize decision making and power vertically. Subordinates report to superiors, who in turn report to their own superiors. This chain continues up the hierarchy until the very top. Strongly hierarchical organizations include the U.S. military and the Catholic church. Most work organizations fall somewhere between these two extremes. However, the majority of large commercial organizations have a fairly hierarchical structure.