A chain of command is part of a hierarchical organizational structure. It is the line along which orders are passed downward and other information is passed upward. In a hierarchical organization, the chain of command must be followed to ensure efficiency.
In a business that uses a chain of command, we can imagine a company president. Below that person are three vice presidents. Below them are various managers. Below each of the managers is staff. In a chain of command, a vice president (for example) would not give orders directly to a staff member. Instead, the vice president would tell the manager what to get done and the manager would tell staff members to carry the task out. If staff members have important information, they do not pass it directly to a vice president or the president. Instead, they pass it to their manager, who passes it to the vice president, who passes it to the president.
A chain of command is this sort of a hierarchical organizational structure.