What Is Hierarchy of Management?

What Is Hierarchy of Management?


What Is the Meaning of “Hierarchical Structure”?

A hierarchical structure is a layout of organizational structure where the chain of command or the level of position and ranking looks like a pyramid. This layout consists of multiple entities where every employee in the organization, except one, usually the president or the CEO, is subordinate to someone else within the organization.

Ranked or higher employees exist at a different level, with a singular or group at the top and subsequent levels of power underneath them who sit at the bottom of the pyramid. Each level is in charge of the levels below and reports to the levels above.

How Important Is Hierarchy of Management?

  • Accountability. The hierarchy of management creates a path of responsibility for every project or task.
  • Guidance. Lower employees report to their heads or their managerial staff to help them develop their work skills.
  • Career path. The layout of the hierarchical structure can help the employees determine what smart goals for the career they would like to move up or what company ladder they would like to take.
  • Communication. The hierarchical structure creates an effective communication between the employees, department heads, and other division of the organization. Each one of the level reports to their respective head, and thus establishing better communication plan.

What Kind of Management Is Needed in Flat Hierarchies?

A flat hierarchical structure refers to an organizational structure where the levels of quality management between the staff and management do not exist or only a few management holds the responsibility. The management of a flat hierarchical structure manages the employees less while increasing their involvement in the decision-making process.

The conditions needed in the flat hierarchical structure is:

  • Increasing the transparency of how the decisions are made.
  • Teaching the employee to think with a strategic plan mindset.
  • The employee needs to have all the different access to the resources of the company.

What Are the Three Levels of Hierarchy of Management?

The hierarchy of management consist of three levels: top-level, management, mid-level, management and low-level management.

Top-Level Management. The top-level management holds the responsibility of setting goals, creating a business plan or project plan, and manage the entire organization. They are the leaders of the organization and are also called senior management or executives. They hold titles such as:

  • Chief Executive Officer (CEO)
  • Chief Financial Officer (CFO)
  • Chief Operational Officer (COO)
  • Chief Information Officer (CIO)
  • Chairperson of the Board
  • President
  • Vice-president
  • Corporate head

Mid-Level Management. The mid-level management is those in the levels below top managers. They are the ones who set diverting activities to achieve the goals set by the top management or program management. One of their roles is to motivate and assist those in the low-level. Their titles include:

  • General Manager
  • Plant Manager
  • Regional Manager
  • Divisional Manager

Low-Level Management. The low-level management is considered as the foot soldier of an organization as they are one doing all the work and carrying out the essential task sheet to achieve the goals. The low-level managements are also called first level management, shop level managers, or supervisors. They hold titles such as:

  • Office Manager
  • Shift Supervisor
  • Department Manager
  • Foreperson
  • Crew Leader
  • Store Manager