The pyramid system of the business is defined as a segment where the hierarchy is from top level to the bottom where the positions are differentiated by the terms of managers and senior managers. There is the lower set of workers who are defined as executives, consultants, or labourers. So the work culture is formed such that the other designated person is able to work with the help of the corresponding persons so appointed. The same culture is followed as the status goes lower.
As the percentage of the extern shareholders increases, increases the controlling power of the business.
An example of the Pyramid can be found in the family business that is formed with the motto to follow the structure of the pyramid. Here the head of the concern may have subsidiary concerns and the hierarchy will be created in such a way the decision will be taken by the head of the concern and the same has to be followed by the subsidiaries. The pyramid structure would be followed in the subsidiary sectors as well.
The main authority to make decisions would be taken by the highest name as the main business house which withholds the power. Subsidiary companies are headed by the decision of the board directors and the same has to be followed by the status which is the pyramid structure in place.
The family concern has the control over the percentage of the stake in the company and the same is determined by the amount of stocks and shares held by the prime authority. The percentage of the authority is segregated with the position in the company between the hierarchies set accordingly.
This is basically to have control over the subsidiaries and maintain the same for a long term of the business. However, the old view cannot be explained more appropriately than the modern thought that was developed towards the family business.