What is organisational hierarchy?

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Principles of Management - Fayol > Best Practices > What is organisational hierarchy?

What is organisational hierarchy?
Describe the key management roles and discuss why some roles are considered to be more important or less important at different levels of the organisational hierarchy.

Modern Organisational Hierarchy
Shekar Poojary, Accounts Manager, United Arab Emirates, Member
In the vertical layers of ranks of personnel within an organization, each layer is subordinate to the one above it. Organization hierarchy is often shown in the form of an organization chart.
An extended hierarchy is typical of a bureaucracy, but during the later 20th and early 21st centuries the layers of hierarchical positions within large organizations have often been reduced as part of downsizing exercises.
These result in flat, shallow or nonexistent hierarchies of flexible, flat organizations, within which there is greater employee empowerment and autonomy.
There are no more important or less important managerial roles in a managerial hierarchy. Each layer is an integral part of the whole.

Organizational Hierarchy
Jaap de Jonge, Editor, Netherlands
An organizational hierarchy follows the layout of a pyramid. Every employee in the organization, except the Managing Director, or in large organizations the CEO, is subordinate to someone else within the organization.
The layout of an organizational hierarchy consists of multiple entities that descend into the base of staff level employees, who sit at the bottom of the pyramid.

  • Employees can recognize defined levels of management within the organization in a simple way; authority and levels of responsibility are obvious.
  • Opportunities for promotion are also clear and this may motivate employees to perform well.
  • Hierarchical structures tend to promote developing employees as specialists. As a result, employees may narrow their field of focus and become experts in some specific field.
  • Employees tend to become loyal to their departments and look out for the best interest of their area.
  • Communication across different departments tends to be less effective than in flat organizations, because it has to pass many layers up the chain of command and then down again in another one of the organization until it reaches the right person.
  • Each department makes decisions that benefit its own interests rather than the organization's as a whole. This may lead to unhealthy rivalry between departments.
  • Bureaucracy. This typically hinders an organizationís speed to innovate, to change, and to respond to clients.
  • The salaries for the many layers of management increase the organizationís costs.

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