When Hierarchy works for organizations

According to the Oxford dictionary, the term Hierarchy has several meanings, but two of them are relevant to this post.
1) A system in which members of an organization or society are ranked according to relative status or authority. 2) An arrangement or classification of things according to relative importance or inclusiveness.

The second definition suggesting two ways of arrangement, by importance or by including.

So, when someone is saying Hierarchy what he means? From my humble experience in life, most of the people are using this word with the first definition in mind. On top of that, most of the people that are using the word with the second definition in mind see the arrangement as based on importance.

When we are talking about organizations, organization structures, organization design, and management; we should make a distinction between using hierarchy as the first definition (organized by rank, status or authority) or as a logical structure to arrange people.

Hierarchy as structure (without ranking, authority or importance) exists all around us, and within us. Maybe the best term to define it is fractal. Our body has several systems (digesting system, blood system, nervous system) that are groups of subsystems performing the same functions. These systems and sub-systems in our body are not ranked or have different priorities. They are serving each other. Sometimes by providing coordination and collaboration between different systems, but without any ranking or importance. Hierarchy (or Fractals) as a way to structure organizations to provide services and support to other groups or sub-groups without ranking, authority or importance is a valid and even preferred organization method all around us.

Organizing people by status, authority or importance has deep roots in our history as humans. When humans start to create order and organize themselves, the leader that grouped people received or imposed different status. As society evolved and the groups grew, leadership was divided and different levels of ranks (hierarchies) formed. This organization structure includes power and very fast turn the elements with the status to be receivers of service, decision making, commanders and controllers, everything but service providers.

Society change over time mainly to adjust to the environment. Therefore we moved from tribes to kings, from kings to states, from states to democratic countries. This change is also happening in organizations but at a different pace. If you compare your experience form organization structure and culture to your grandpa and fathere; you’ll find out that each generation is talking about different organizations.

Today’s complex and unexpected business world requires organizations to be fast reacting. Organizations need to operate the same way as your body responds to instance change that might be a risk and not like our current corporates reacting to events. Therefore, if organizations are using hierarchy to organize groups, to serve one each other; they are leaving Hierarchy (Fractals) in a way that it will help them long term.

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