Hierarchy – definition and meaning
A hierarchy is a system in which the members of a society, company, or organization have a different status. Each member has a neighbor whose level is either higher or lower, i.e., except for the top and bottom members. ‘Higher,’ in this context, means having a superior status, more authority, or greater influence.
When a system arranges people, ideas, or things according to their importance, it is a hierarchical system. We tend to arrange hierarchies of people according to their abilities, years of service (seniority), or professional or social standing.
BusinessDictionary.com has the following definition of the term:
“A pyramid-like ranking of ideas, individuals, items, etc., where every level (except the top and the bottom ones) has one higher and one lower neighbor.”
When we talk about a hierarchy in business, i.e., a corporate hierarchy, we mean organizations with different layers.
Etymology of hierarchy
Etymology is the study of the origin of words and also how they evolved. We call etymology specialists etymologists.
In late fourteenth century Britain, herarchie and ierarchie meant ‘rank in the sacred order; one of the three divisions of the nine orders of angels.’ It also meant ‘dominion or rule.’ The words came from Old French ierarchie, which came from Medieval Latin hierarchia.
The Old Greek word hierarkhia meant ‘rule of a high priest.’
Around 1610, the term acquired the meaning of a ‘ranked organization of persons or things.’ Initially, people used it for the clergy. Later it spread to other organizations.
Hierarchy in companies
In the world of business, the term refers to the levels of management in any company, from the lowest to highest. Put simply, a system in which there is a pecking order.
Individuals on a higher level have more control and authority than those below them. They also have more decision-making power.
Those lower down the corporate ladder take directions from people further up.
According to Chron, small businesses can usually operate well with looser structures than large corporations. However, this depends on the people working in the small company.
As soon as a company begins to grow, job descriptions and structure become much more important.
“As businesses grow, hierarchies develop that clarify who has decision-making power and control, and who gives direction to whom.”
In the past, companies tended to be more authoritarian than they are today. Small organizations, for example, were more hierarchical a hundred years ago than current ones.
Corporate hierarchy – different levels
There are several levels of management and non-management in the corporate world.
Below, there are three levels of manager. ReferenceforBusiness makes the following comment regarding the three levels:
“These three main levels of managers form a hierarchy, in which they are ranked in order of importance.”
“In most organizations, the number of managers at each level is such that the hierarchy resembles a pyramid.”
Top managers or senior management work at the top level of a company. In large corporations, they may work in the top two levels.
For example, the **CEO (Chief Executive Officer), COO (Chief Operational Officer), and CIO (Chief Information Officer) are senior management positions. The Vice-President, Chairman of the Board, and President are also top-level managers.
** The CEO is the most senior corporate officer.
People who work in middle management receive orders from the top managers. The General Manager, Divisional Manager, Regional Manager, and Plant Manager, for example, are middle-level managers.
While senior management sets out the goals of the company, middle managers are responsible for carrying them out.
We also refer to this level as lower management. Some people refer to them as supervisors or first-line managers.
The Shift Supervisor, Office Manager, and Foreman (Foreperson) are first-level managers. Store Managers and Crew Leaders are also lower management positions.
Lower management is responsible for the workers who make the product or deliver the service, i.e., line workers.
Video – Corporate Hierarchy
In this TEDx Talks video, Prof. Markus Reitzig talks about hierarchies. Specifically, he explains how they can help and hamper great organizations.