Sphere of Influence

In business, the sphere of influence is a list of an employee’s personal and professional contacts whom they consider to be trustworthy. In broader contexts, the sphere of influence of an organization, business, or group determines its power over other organizations, businesses, and groups. The level of power or influence a company can exert is commonly related to its size.

Understanding the sphere of influence

The sphere of influence is difficult to measure and even more so to define. As a very general rule, it can be best described as containing all that an individual or organization can affect but not directly control.

The sphere of influence of an employee is a list of all the people that know and trust them in personal and professional contexts. Trust in this case can present opportunities such as referrals, word-of-mouth marketing, or even direct business.

For example, someone may ask a successful financial planner whether there are tax implications for an inheritance. Someone else who wants to purchase a used car may ask a mechanic about known faults with the model in question. Sales executives also build up a sphere of influence over time as they ask for referrals and exert influence over prospects.

Leaders who utilize the sphere of influence understand the importance of productive relationships with their subordinates. They use their position of authority to inspire passion, create buy-in, and enable others to reach personal and organizational objectives.

Marketing to one’s sphere of influence

To market to your sphere of influence, it is important to start by organizing a list of contacts. Those with extensive networks or in a suitable industry may choose to use a CRM platform, while others can create a simple spreadsheet. 

In addition to a contact’s name, number, and email address, it can also be helpful to add information such as birthdays, anniversaries, hobbies, and favorite restaurants. Some of this may seem extraneous, but if you know someone’s birthday, you can send them a card. If you know a prospect’s favorite restaurant, you can propose to meet them there and pitch your product or service.

Next, break down the list into specific categories which may include:

  • Family.
  • Friends.
  • Co-workers.
  • Acquaintances. 
  • Leads.
  • Prospects
  • Clients. 
  • Professional contacts. 
  • Mentors, and
  • Website visitors.

Once the sphere of influence has been constructed, it’s time start marketing. Like any such endeavor, ensure prospects are kept warm and communicate across multiple channels if necessary.

When you take the time to add a personal touch to your communications, you also increase the likelihood of word-of-mouth recommendations.

The sphere of influence for organizations

For organizations, the sphere of influence is often present in the following contexts:

  • Products or markets – Microsoft has a significant sphere of influence in the operating systems market. Companies interested in selling software must first consider whether it will be compatible with Microsoft’s products.
  • Store location – retailers who wish to turn a profit need to consider the potential for a location to attract customers. In malls and similar brick-and-mortar locations, foot traffic is influenced by flagship brands. When Australia’s largest mall Chadstone underwent renovations in 2016, for example, the redevelopment was anchored by the global players Uniqlo, Sephora, and H&M. 
  • Government – for better or worse, companies with deep pockets can influence governments to further their own interests. For example, banks, trade associations, and related financial institutions spent around $2 billion trying to influence the outcome of the 2016 election in the United States.

Key takeaways:

  • In business, the sphere of influence is a list of an employee’s personal and professional contacts whom they consider to be trustworthy. 
  • The sphere of influence is difficult to measure and even more so to define. As a very general rule, it can be best described as containing all that an individual or organization can affect but not directly control.
  • Individuals can utilize their sphere of influence to market products and services with a personal touch. For organizations, the sphere of influence is present in markets, products, store locations, and government.

Types of Organizational Structures

Organizational Structures

Siloed Organizational Structures


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.



Open Organizational Structures




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.

Connected Business Frameworks

Portfolio Management

Project portfolio management (PPM) is a systematic approach to selecting and managing a collection of projects aligned with organizational objectives. That is a business process of managing multiple projects which can be identified, prioritized, and managed within the organization. PPM helps organizations optimize their investments by allocating resources efficiently across all initiatives.

Kotter’s 8-Step Change Model

Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.

Nadler-Tushman Congruence Model

The Nadler-Tushman Congruence Model was created by David Nadler and Michael Tushman at Columbia University. The Nadler-Tushman Congruence Model is a diagnostic tool that identifies problem areas within a company. In the context of business, congruence occurs when the goals of different people or interest groups coincide.

McKinsey’s Seven Degrees of Freedom

McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.

Mintzberg’s 5Ps

Mintzberg’s 5Ps of Strategy is a strategy development model that examines five different perspectives (plan, ploy, pattern, position, perspective) to develop a successful business strategy. A sixth perspective has been developed over the years, called Practice, which was created to help businesses execute their strategies.

COSO Framework

The COSO framework is a means of designing, implementing, and evaluating control within an organization. The COSO framework’s five components are control environment, risk assessment, control activities, information and communication, and monitoring activities. As a fraud risk management tool, businesses can design, implement, and evaluate internal control procedures.

TOWS Matrix

The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.

Lewin’s Change Management

Lewin’s change management model helps businesses manage the uncertainty and resistance associated with change. Kurt Lewin, one of the first academics to focus his research on group dynamics, developed a three-stage model. He proposed that the behavior of individuals happened as a function of group behavior.

Organizational Structure Case Studies

Airbnb Organizational Structure

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 Organizational Structure

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 Organizational Structure

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 Organizational Structure

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 Organizational Structure

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 Organizational Structure

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 Organizational Structure

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.

McDonald’s Organizational Structure

McDonald’s has a divisional organizational structure where each division – based on geographical location – 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 Organizational Structure

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 current CEO Doug McMillon 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 Organizational Structure

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.

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