Hierarchical organization
A hierarchical organization or hierarchical organisation is an organizational structure where every entity in the organization, except one, is subordinate to a single other entity. This arrangement is a form of hierarchy. In an organization, this hierarchy usually consists of a singular/group of power at the top with subsequent levels of power beneath them. This is the dominant mode of organization among large organizations; most corporations, governments, criminal enterprises, and organized religions are hierarchical organizations with different levels of management power or authority. For example, the broad, top-level overview of the hierarchy of the Catholic Church consists of the Pope, then the Cardinals, then the Archbishops, and so on. Another example is the hierarchy between the four castes in the Hindu caste system, which arises from the religious belief "that each is derived from a different part of the creator God’s body, descending from the head downwards."
Members of hierarchical organizational structures mainly communicate with their immediate superior and their immediate subordinates. Structuring organizations in this way is useful, partly because it reduces the communication overhead costs by limiting information flows.
Visualization
A hierarchy is typically visualized as a pyramid, where the height of the ranking or person depicts their power status and the width of that level represents how many people or business divisions are at that level relative to the whole—the highest-ranking people are at the apex, and there are very few of them, and in many cases only one; the base may include thousands of people who have no subordinates. These hierarchies are typically depicted with a tree or triangle diagram, creating an organizational chart or organogram. Those nearest the top have more power than those nearest the bottom, and there being fewer people at the top than at the bottom. As a result, superiors in a hierarchy generally have higher status and obtain higher salaries and other rewards than their subordinates.Although the image of organizational hierarchy as a pyramid is widely used, strictly speaking such a pyramid draws on two mechanisms: hierarchy and division of labour. As such, a hierarchy can, for example, also entail a boss with a single employee. When such a simple hierarchy grows by subordinates specialising and subsequently also establishing and supervising their own departments, the typical pyramid arises. This specialisation process is called division of labour.
Common social manifestations
Governmental organizations and most companies feature similar hierarchical structures. Traditionally, the monarch stood at the pinnacle of the state. In many countries, feudalism and manorialism provided a formal social structure that established hierarchical links pervading every level of society, with the monarch at the top.In modern post-feudal states the nominal top of the hierarchy still remains a head of state – sometimes a president or a constitutional monarch, although in many modern states the powers of the head of state are delegated among different bodies. Below or alongside this head there is commonly a senate, parliament or congress; such bodies in turn often delegate the day-to-day running of the country to a prime minister, who may head a cabinet. In many democracies, constitutions theoretically regard "the people" as the notional top of the hierarchy, above the head of state; in reality, the people's influence is often restricted to voting in elections or referendums.
In business, the business owner traditionally occupies the pinnacle of the organization. Most modern large companies lack a single dominant shareholder and for most purposes delegate the collective power of the business owners to a board of directors, which in turn delegates the day-to-day running of the company to a managing director or CEO. Again, although the shareholders of the company nominally rank at the top of the hierarchy, in reality many companies are run at least in part as personal fiefdoms by their management. Corporate governance rules attempt to mitigate this tendency.
Origins and development of social hierarchical organization
Smaller and more informal social units – families, bands, tribes, special interest groups – which may form spontaneously, have little need for complex hierarchies – or indeed for any hierarchies. They may rely on self-organizing tendencies.A conventional view ascribes the growth of hierarchical social habits and structures to increased complexity;
the religious syncretism
and issues of tax-gathering
in expanding empires played a role here.
However, others have observed that simple forms of hierarchical leadership naturally emerge from interactions in both human and non-human primate communities. For instance, this occurs when a few individuals obtain more status in their tribe, family or clan, or when competences and resources are unequally distributed across individuals.
Studies
The organizational development theorist Elliott Jaques identified a special role for hierarchy in his concept of requisite organization.The iron law of oligarchy, introduced by Robert Michels, describes the inevitable tendency of hierarchical organizations to become oligarchic in their decision making.
The Peter Principle is a term coined by Laurence J. Peter in which the selection of a candidate for a position in an hierarchical organization is based on the candidate's performance in their current role, rather than on abilities relevant to the intended role. Thus, employees only stop being promoted once they can no longer perform effectively, and managers in an hierarchical organization "rise to the level of their incompetence."
Hierarchiology is another term coined by Laurence J. Peter, described in his humorous book of the same name, to refer to the study of hierarchical organizations and the behavior of their members.
David Andrews' book The IRG Solution: Hierarchical Incompetence and how to Overcome it argued that hierarchies were inherently incompetent, and were only able to function due to large amounts of informal lateral communication fostered by private informal networks.
Types of hierarchy
Hierarchical organization is a phenomenon with many faces. To understand and map this diversity, various typologies have been developed. Formal versus informal hierarchy is a well-known typology, but one can alsodistinguish four hierarchy types.
Two types of hierarchy: Formal and informal
A well-known distinction is between formal and informal hierarchy in organizational settings. According to Max Weber, the formal hierarchy is the vertical sequence of official positions within one explicit organizational structure, whereby each position or office is under the control and supervision of a higher one. The formal hierarchy can thus be defined as "an official system of unequal person-independent roles and positions which are linked via lines of top-down command-and-control." By contrast, an informal hierarchy can be defined as person-dependent social relationships of dominance and subordination, emerging from social interaction and becoming persistent over time through repeated social processes. The informal hierarchy between two or more people can be based on difference in, for example, seniority, experience or social status.The formal and informal hierarchy may complement each other in any specific organization and therefore tend to co-exist in any organization. But the general pattern observed in many organizations is that when the formal hierarchy decreases, the informal hierarchy increases, or vice versa.