Sociocracy is a way of governing a group in which policy decisions are made by consent: a proposal passes when no member has a reasoned objection, not when a majority votes for it. Work is organised in circles linked by members who sit in two circles at once (double linking). The word goes back to Auguste Comte in 1851; the method used in organisations today was developed by the Dutch engineer Gerard Endenburg in his family’s company, building on the consent-based school run by Kees Boeke.
Drawing by The Business Engineer.
How it works
01
Consent, not consensus
A proposal is adopted when nobody raises a reasoned objection. People do not have to like it; it only has to be, in Sociocracy 3.0's phrase, good enough for now and safe enough to try until the next review.
02
Circles own domains
Each team is a circle with its own area of decisions. Circles can sit inside larger circles, as Endenburg's company laid circles over its normal management hierarchy.
03
Double linking
Two linked circles each send a member into the other's governance decisions, so information and influence flow both ways rather than only down.
04
Roles chosen by consent
For roles such as facilitator or representative, members nominate someone, give their reasons, and then consent to a nominee, instead of a simple majority vote.
Where you see it today
In agile teams: Sociocracy 3.0
Launched in March 2015 by Bernhard Bockelbrink and James Priest, later joined by Liliana David, Sociocracy 3.0 is a free, Creative Commons set of patterns that mixes sociocracy with Agile and Lean. Teams can adopt single practices, such as consent decisions or double linking, without reorganising the whole company.
In Holacracy
Holacracy’s constitution uses a similar rule: a governance proposal is adopted once every circle member confirms they have no objections, and objections must be addressed before it passes. It is one of the better-known self-management systems built on consent rather than votes.
In the research
Romme (1999) documented how the Dutch firm Endenburg Elektrotechniek laid a circular structure over its normal management hierarchy, so that control ran through feedback rather than a single authority. Romme and Endenburg (2006) reported tests of this circular design in over 30 organizations.
Deciding how to use AI
Rules on AI tools change faster than most policy cycles. A consent decision with a review date suits that pace: a team can adopt an AI-use rule that is safe enough to try, and anyone with a reasoned objection, such as a data-protection risk, can stop it before it becomes policy.
Sociocracy vs other ways to decide
Sociocracy (consent)
How a decision passesNo reasoned objection from circle members
Typical riskSlow if people raise preferences as objections
Majority vote
How a decision passesMore than half agree
Typical riskA large minority is overruled
Consensus
How a decision passesEveryone agrees
Typical riskOne person can block indefinitely
Hierarchy
How a decision passesThe manager decides
Typical riskInformation from the front line is lost
Holacracy
How a decision passesNo valid objection, under a written constitution
Typical riskRules can feel heavy for small teams
How to use it
Start with one recurring decision, such as a team policy, and decide it by consent with a fixed review date.
Teach the difference between an objection (a reasoned risk to the aim) and a preference; only objections stop a proposal.
Run rounds so each person speaks once before open discussion.
Link two teams that depend on each other by giving each a seat in the other's policy meetings.
Fill roles such as facilitator and secretary by open nomination and consent, and review them on a schedule.
The Business Engineer lens
As AI changes how teams work, the bottleneck becomes how fast an organisation can change its own rules safely. Consent with review dates is a governance method built for that kind of fast, reversible change.
A way of running a group in which teams called circles make policy by consent, meaning a decision passes when nobody has a reasoned objection, and circles are linked so information flows up and down.
What is the difference between consent and consensus?
Consensus asks everyone to agree; consent asks whether anyone has a reasoned objection. A proposal can pass by consent even if some people would prefer something else.
Who created sociocracy?
The word goes back to Auguste Comte in 1851 and was later used by Lester Frank Ward; Kees Boeke ran a school by consent from 1926, and Gerard Endenburg developed the Sociocratic Circle Organisation Method for business.
Is sociocracy the same as Holacracy?
No. Both use circles and objection-based decisions, but Holacracy runs on its own written constitution, while sociocracy and Sociocracy 3.0 are sets of principles and patterns teams adapt.
Sociocracy is based on mid-nineteenth-century ideas around applied sociology. Initially, a sociocracy was defined as a government applying what it had learned from sociologists to create a society that benefitted everyone. As a result, societies could avoid autocratic rulers who would only act in their own best interests. Sociocracy therefore is a governance system that helps organizations self-govern based on values of equality.
Key Components
Understanding sociocracy
In business, sociocracy is a systems-based governance approach that advocates employee empowerment, autonomy, and self-expression.
The three pillars of sociocracy
Sociocratic principles are realized through three key features, known as pillars.
Strengths
โ
Limitations
✗Policy decisions are made by consent, and circle members also choose people for roles by consent.
✗Note also that decisions are not made by an authority, traditional hierarchy structure, or majority vote.
Quick Answers
What is the three pillars of sociocracy?
Sociocratic principles are realized through three key features, known as pillars.
Key Insight
Sociocracy is based on mid-nineteenth-century ideas around applied sociology. Initially, a sociocracy was defined as a government applying what it had learned from sociologists to create a society that benefitted everyone. As a result, societies could avoid autocratic rulers who would only act in their own best interests. Sociocracy therefore is a governance system that helps organizations self-govern based on values of equality.
Exec Package + Claude OS Master Skill | Business Engineer Founding Plan
FourWeekMBA x Business Engineer | Updated 2026
Sociocracy is based on mid-nineteenth-century ideas around applied sociology. Initially, a sociocracy was defined as a government applying what it had learned from sociologists to create a society that benefitted everyone. As a result, societies could avoid autocratic rulers who would only act in their own best interests. Sociocracy therefore is a governance system that helps organizations self-govern based on values of equality.
Concept Overview
Explanation– Sociocracy is a holistic governance system and organizational structure that prioritizes equivalence, transparency, and effectiveness. It emphasizes shared decision-making and aims to create harmonious and self-organizing groups or organizations.
Core Principles
Explanation– Equivalence: All individuals have equal influence in decision-making, ensuring that power is distributed rather than concentrated in a few. – Consent Decision-Making: Decisions are made when there are no paramount objections, fostering consensus while allowing for swift action. – Circle Structure: Organizations are divided into interconnected circles, each with specific responsibilities and autonomy. – Double-Linking: Circles are connected by individuals who serve in multiple circles, facilitating communication and alignment. – Continuous Improvement: Sociocracy encourages continuous feedback and adaptation through iterative processes, promoting resilience and flexibility.
Governance Process
Explanation– Sociocratic organizations employ a governance process known as the Consent Decision-Making Process. It involves presenting a proposal, seeking consent (no paramount objections), and ensuring that all concerns are addressed. This process balances autonomy and alignment.
Organizational Structure
Explanation– Sociocratic organizations are structured in nested circles. Each circle has its specific role and autonomy while being linked to broader circles. This structure promotes transparency, accountability, and communication while allowing for local decision-making.
Leadership
Explanation– Leadership in Sociocracy is distributed rather than relying on a single authority figure. Leaders emerge based on their ability to contribute effectively within circles. The focus is on role-based leadership that can change as needed, fostering collaboration and diversity of perspectives.
Adaptability
Explanation– A key strength of Sociocracy lies in its adaptability. Organizations can adjust and evolve rapidly to changing circumstances. The feedback loop and continuous improvement processes make it resilient and capable of responding to complexity effectively.
Challenges
Explanation– Implementing Sociocracy can be challenging, particularly for organizations accustomed to traditional hierarchies. Achieving true equivalence and consent may require cultural shifts and comprehensive training. Misunderstanding or misapplication of the principles can lead to ineffectiveness.
Applications
Explanation– Sociocracy has found applications in various sectors, including businesses, nonprofits, community organizations, and education. It is well-suited for organizations seeking to promote collaboration, efficiency, and adaptability while ensuring equivalence among members.
Global Adoption
Explanation– Sociocracy has gained global recognition and is utilized in numerous countries. Its principles align with modern values of shared leadership, equality, and responsive governance, making it relevant to diverse cultures and organizational contexts.
Understanding sociocracy
In business, sociocracy is a systems-based governance approach that advocates employee empowerment, autonomy, and self-expression. This allows employees to work in alignment with company goals and strategies while maintaining their individuality at the project level. In this way, a sociocracy is a participatory form of decision making that differs from the traditional vertical (hierarchical) management system.
Sociocracy is based on certain methods, principles, and structures that create resilient and coherent systems. In the next section, we will discuss these in more detail.
The three pillars of sociocracy
Sociocratic principles are realized through three key features, known as pillars.
1 โ Decision making by elected consent
Policy decisions are made by consent, and circle members also choose people for roles by consent.
Each member argues in favor of the person they consider the most competent, and each member must provide consent for the same individual to reach group consensus. In sociocracy this is consent rather than consensus: a choice passes when no circle member has a reasoned objection, even if some would prefer another option.
Note also that decisions are not made by an authority, traditional hierarchy structure, or majority vote.
2 โ Circles and double-linking
The organization of working groups, units, or departments is represented by nested, hierarchical circles. Here, hierarchical refers to domains of authority. There is no relationship to control, power, or coercion.
During meetings, circle members function as equals and each circle elects a secretary, facilitator, chair, and leader. Day-to-day decisions are made by the leader, but the leader is governed by a policy formulated by every member of each circle.
Each circle is linked to both a parent and sub-circle via a double link, otherwise known as an overlap. This overlap occurs when one or two members of one circle become elected delegates in the parent circle. In other words, they are full participating members of both circles. Delegates work closely with parent circle (operational) leaders to ensure that their specific needs, goals, or proposals are duly considered.
3 – Feedback
Feedback is a critical part of all activities and roles at each level of the organization. It should be given by all employees and not concentrated on those with seniority or title.
In a sociocracy, feedback takes the form of meaningful information about the functioning of an organization. It should be collected systematically and cyclically using the lead-do-measure principle:
Lead โ plan a meeting and then make policy. This includes the collaborative creation of an agenda and even trivial details such as where and when the meeting will take place.
Do โ perform the meeting and carry out policy. Sociocracy advocates the use of rounds, where each member of the circle has a chance to speak once per round of discussion. This fosters mutual understanding and teaches employees listening skills.
Measure โ evaluate the meeting and evaluate policy. Evaluating the effectiveness or quality of the meeting itself is a core component of sociocracy. The secretary of the circle should record the minutes and suggest issues or topics for discussion in subsequent meetings.
Feedback should always focus on whether the function in question was able to move the circle closer to its goals.
Key takeaways
Sociocracy is an organizational governance system with a focus on equality and continuous improvement.
Sociocracy empowers employees to make their own decisions while maintaining an alignment with company goals and strategies.
Sociocracy is based on three key pillars: decision making by elected consent, circles with double-links, and continuous and collaborative feedback.
Key Highlights
Origins and Principles:
Sociocracy traces its roots to mid-nineteenth-century ideas of applied sociology, aiming to create a society that benefits everyone through governance informed by sociological insights.
It opposes autocratic rulers and promotes a system based on values of equality.
Application in Business:
In business, sociocracy is a governance approach that emphasizes employee empowerment, autonomy, and self-expression.
It enables employees to work in alignment with company objectives while retaining individuality at the project level.
Sociocracy stands in contrast to traditional hierarchical management.
Three Pillars of Sociocracy:
Decision Making by Elected Consent:
Decision-making occurs by consent, where circle members collaboratively choose an elected person from their peers.
Consent is reached when no member has a reasoned objection, not by authority or majority vote.
Circles and Double-Linking:
Working groups are organized into nested, hierarchical circles based on domains of authority.
Each circle elects leaders, and day-to-day decisions are governed by policies agreed upon by all members.
Circles are linked to parent and sub-circles through elected delegates who actively participate in both levels.
Feedback:
Feedback is integral at all levels and roles within the organization.
It’s given by all employees systematically and cyclically, emphasizing meaningful information about organizational functioning.
Feedback follows the lead-do-measure principle, focusing on planning, execution, and evaluation of meetings and policies.
Continuous Improvement:
Sociocracy emphasizes continuous improvement and alignment with organizational goals.
Through elected consent, circles with double-links, and feedback processes, the system aims to enhance decision-making, collaboration, and performance
Sociocracy
DescriptionSociocracy is a governance and decision-making system that emphasizes collaboration, equivalence, and consent-based decision-making. It aims to distribute power evenly among members and ensure that everyone’s voice is heard in organizational decision-making processes. Sociocracy fosters transparency, effectiveness, and adaptability in organizations.
When to Apply– Organizational Governance: Implementing sociocratic principles to distribute authority and decision-making across the organization, fostering transparency and accountability. – Team Collaboration: Using sociocratic methods to facilitate inclusive and participatory decision-making within teams, improving communication and engagement. – Conflict Resolution: Applying sociocratic practices to resolve conflicts and disagreements constructively, promoting understanding and consensus. – Change Management: Leveraging sociocracy to implement organizational changes smoothly and collaboratively, ensuring buy-in and alignment among stakeholders. – Leadership Development: Incorporating sociocratic principles into leadership training and development programs to cultivate inclusive and empowering leadership styles.
Consent Decision-Making
DescriptionConsent Decision-Making is a key aspect of sociocracy that involves reaching decisions based on consent rather than consensus or majority rule. It allows decisions to move forward as long as there are no reasoned objections from members, ensuring efficient and inclusive decision-making processes.
When to Apply– Organizational Decision-Making: Using consent decision-making to make governance and operational decisions within the organization, balancing efficiency with inclusivity. – Team Meetings: Incorporating consent decision-making into team meetings to streamline decision processes and foster a culture of trust and collaboration. – Project Management: Applying consent decision-making principles in project teams to prioritize tasks, allocate resources, and resolve conflicts effectively. – Policy Development: Utilizing consent decision-making to develop and revise organizational policies and procedures, ensuring that they reflect the needs and values of all stakeholders. – Conflict Resolution: Using consent decision-making to address conflicts and disagreements by finding solutions that satisfy all parties involved.
Dynamic Governance
DescriptionDynamic Governance, also known as Sociocratic Governance, is a governance model based on sociocracy principles. It emphasizes self-organization, distributed authority, and continuous improvement. Dynamic Governance enables organizations to adapt quickly to changing circumstances and empower members to take ownership of their roles and responsibilities.
When to Apply– Organizational Structure: Implementing dynamic governance structures to distribute authority and accountability across the organization, promoting agility and resilience. – Leadership Development: Training leaders and managers in dynamic governance principles to empower them to facilitate self-organization and collaborative decision-making. – Team Empowerment: Applying dynamic governance practices to empower teams to make autonomous decisions and self-manage their work processes. – Continuous Improvement: Using dynamic governance to foster a culture of continuous improvement, where feedback is valued, and processes are regularly reviewed and adapted to enhance effectiveness. – Stakeholder Engagement: Engaging stakeholders in decision-making processes using dynamic governance methods to ensure their perspectives and concerns are considered in organizational decisions.
Circle Structure
DescriptionCircle Structure is a fundamental component of sociocracy, organizing individuals into interconnected circles or teams responsible for specific domains or functions within the organization. Each circle operates autonomously within its domain while also being linked to other circles through governance processes. Circle structure promotes transparency, accountability, and collaboration across the organization.
When to Apply– Organizational Design: Designing circle structures to align with the organization’s goals, functions, and communication needs, fostering clarity and efficiency. – Role Definition: Defining roles and responsibilities within circles to ensure clarity and accountability, facilitating effective collaboration and decision-making. – Project Management: Organizing project teams into circles to streamline communication, decision-making, and resource allocation, enhancing project efficiency and effectiveness. – Cross-Functional Collaboration: Facilitating collaboration between circles to address complex problems or projects that require input and expertise from multiple domains, promoting synergy and innovation. – Performance Evaluation: Using circle structure to evaluate individual and team performance based on defined roles and objectives, supporting fair and transparent feedback processes.
Double-Linking
DescriptionDouble-Linking is a sociocratic practice that connects circles within an organization through overlapping memberships. Each circle has representatives who participate in both their circle’s governance meetings and the governance meetings of a higher-level circle. Double-linking fosters communication, coordination, and alignment between circles, ensuring that decisions are made collaboratively and consistently across the organization.
When to Apply– Inter-Circle Communication: Using double-linking to facilitate communication and information sharing between circles, promoting alignment and collaboration on shared goals and initiatives. – Decision Consistency: Ensuring consistency in decision-making across circles by having representatives participate in governance meetings at multiple levels of the organization, minimizing conflicts and misunderstandings. – Conflict Resolution: Resolving conflicts and disagreements between circles through double-linking, as representatives can bridge communication gaps and find mutually acceptable solutions. – Organizational Alignment: Aligning the goals, strategies, and activities of different circles within the organization through double-linking, promoting coherence and synergy in pursuit of organizational objectives. – Leadership Development: Developing leadership skills and competencies among circle representatives who participate in governance meetings at multiple levels, fostering holistic understanding and strategic thinking.
Self-Organization
DescriptionSelf-Organization is a core principle of sociocracy that empowers individuals and teams to organize themselves and make decisions autonomously within defined boundaries. Self-organization fosters creativity, innovation, and adaptability, allowing organizations to respond quickly to changing conditions and leverage the collective intelligence of their members.
When to Apply– Team Empowerment: Empowering teams to self-organize and make decisions about how to accomplish their goals, fostering ownership and motivation among team members. – Agile Practices: Adopting agile practices such as Scrum or Kanban that emphasize self-organization, collaboration, and iterative improvement, enabling teams to deliver value more efficiently and effectively. – Holacracy: Implementing holacracy, a management system based on sociocracy principles, to distribute authority and decision-making power throughout the organization, promoting agility and resilience. – Innovation Culture: Cultivating an organizational culture that values experimentation, autonomy, and continuous learning, encouraging employees to take initiative and pursue innovative ideas. – Leadership Support: Providing leadership support and resources to enable self-organization, such as training, coaching, and access to decision-making tools and frameworks.
Democratic Decision-Making
DescriptionDemocratic Decision-Making is a key aspect of sociocracy that ensures all members have an equal voice in the decision-making process. It involves seeking input from all stakeholders, considering their perspectives and preferences, and reaching decisions through consent-based methods that prioritize inclusivity and fairness. Democratic decision-making promotes engagement, transparency, and accountability within organizations.
When to Apply– Inclusive Governance: Using democratic decision-making processes to involve all relevant stakeholders in organizational governance, ensuring diverse perspectives are considered and valued. – Conflict Resolution: Resolving conflicts and disagreements through democratic decision-making methods that allow all parties to express their views and participate in finding mutually acceptable solutions. – Policy Development: Developing organizational policies and procedures through democratic decision-making processes that incorporate input from affected stakeholders, enhancing legitimacy and compliance. – Change Management: Engaging employees in democratic decision-making around organizational changes, such as restructuring or process improvements, to build consensus and mitigate resistance. – Employee Participation: Encouraging employee participation in decision-making through democratic mechanisms such as town hall meetings, surveys, or focus groups, fostering a sense of ownership and commitment.
Facilitated Meetings
DescriptionFacilitated Meetings are structured gatherings facilitated by trained facilitators to ensure effective communication, collaboration, and decision-making among participants. In sociocracy, facilitated meetings help teams and circles engage in meaningful dialogue, generate creative ideas, and reach agreements that honor individual perspectives while advancing collective goals.
When to Apply– Decision-Making Meetings: Facilitating meetings focused on making decisions within teams or circles using consent-based methods, ensuring that all voices are heard and conflicts are addressed constructively. – Problem-Solving Workshops: Using facilitated meetings to brainstorm solutions, analyze root causes, and develop action plans for addressing complex problems or challenges facing the organization. – Strategic Planning Sessions: Facilitating meetings to develop strategic plans, set goals, and prioritize initiatives in alignment with the organization’s mission, vision, and values, fostering alignment and commitment among stakeholders. – Team Retrospectives: Facilitating retrospectives or debriefing sessions to reflect on past experiences, identify areas for improvement, and make adjustments to enhance team performance and effectiveness. – Conflict Resolution Forums: Facilitating mediation or conflict resolution sessions to help parties in dispute understand each other’s perspectives, find common ground, and negotiate mutually acceptable solutions, promoting harmony and collaboration.
Transparent Communication
DescriptionTransparent Communication is a foundational principle of sociocracy that emphasizes openness, honesty, and clarity in communication within organizations. Transparent communication promotes trust, accountability, and collaboration among members, enabling effective decision-making and problem-solving processes.
When to Apply– Information Sharing: Creating channels and mechanisms for transparent communication, such as regular updates, newsletters, or town hall meetings, to keep all stakeholders informed about organizational developments, challenges, and successes. – Feedback Mechanisms: Establishing feedback mechanisms, such as suggestion boxes, surveys, or open-door policies, to encourage employees to share their ideas, concerns, and feedback openly and constructively, fostering a culture of continuous improvement and engagement. – Decision Transparency: Communicating decision-making processes, rationale, and outcomes openly and transparently to ensure that all stakeholders understand how decisions are made and can provide input or feedback as needed, enhancing trust and accountability. – Conflict Resolution: Encouraging transparent communication in conflict resolution processes, where parties openly express their concerns, interests, and needs, and work together to find mutually satisfactory solutions, building trust and understanding. – Crisis Management: Maintaining transparent communication during crises or emergencies, where timely and accurate information sharing is crucial for maintaining trust, reducing uncertainty, and coordinating response efforts effectively.
Organizational Feedback Loops
DescriptionOrganizational Feedback Loops are mechanisms that enable continuous feedback and learning within organizations. In sociocracy, feedback loops help teams and circles gather input, evaluate performance, and make adjustments to improve processes and outcomes over time. Organizational feedback loops support adaptation, innovation, and resilience in dynamic environments.
When to Apply– Performance Reviews: Establishing regular performance review processes that involve feedback from peers, supervisors, and subordinates, providing individuals and teams with insights into their strengths, weaknesses, and areas for development, fostering growth and improvement. – Customer Feedback Systems: Implementing customer feedback systems, such as surveys, focus groups, or suggestion boxes, to gather input and insights from customers about their experiences, preferences, and needs, informing product development, service enhancements, and customer relationship management strategies. – Process Improvement Initiatives: Launching process improvement initiatives that involve collecting feedback from stakeholders, analyzing performance data, identifying inefficiencies or bottlenecks, and implementing changes to streamline workflows, enhance quality, or reduce costs, promoting operational excellence and innovation. – Project Retrospectives: Conducting project retrospectives or lessons learned sessions at the end of projects to reflect on successes, challenges, and opportunities for improvement, capturing valuable insights and best practices to inform future projects and initiatives. – Organizational Culture Assessments: Conducting assessments or surveys to gauge organizational culture, climate, and employee satisfaction levels, identifying areas of strength and areas for improvement, and implementing interventions to enhance culture, morale, and engagement.
In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.
In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.
Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
McDonaldโs has a divisional organizational structure where each division โ based on geographical location โ is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the CEO (John Furner since 1 February 2026) is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
