Every organization needs a certain structure or hierarchy for the delineation of the authority, the responsibilities, and the policies and for defining the formal communication channels.
The hierarchical arrangements in the organizations determine the major extent of dissemination of responsibilities and leadership throughout the organization. For arranging all the above mentioned aspects organizations adopt either a hierarchical or a flat structure.
In hierarchical arrangement of organizations, refers to a fixed layout of departments and designations that includes multiple entities which on a pyramidal form descend into the base starting from top level employees and moving forward to executive level employees.
Business organizations using informal control and coordination are not able to progress when they tend to expand the organizations. Large business houses or small business companies expanding their business face complexities and a lot of changes in the external environment, then a need arises to integrate the functional areas of the organizations by framing policies to guide the managerial actions.
Most of the organizations then prefer to adopt hierarchical structures with predefined levels of authority and responsibility. Hierarchies help the business owners to manage their business effectively and efficiently.To help ensure proper hierarchies in businesses, it is good for someone in the organization themselves to have a masters of organizational leadership.The hierarchies help the management to lead the business through planned policies.
The advantages of adopting a hierarchical structure include:
- Defied levels of leadership and authority. In the hierarchical structures employees are well arranged in different levels of pre-defined responsibilities & authorities which enhance their performance and often motivate them with the lucrative promotion opportunities.
- Hierarchical structures develop their employees in certain specialized tasks by narrowing their focus and scope of work. Since the employees are required to manage the responsibilities at their level only, it promotes specialization and employees become experts in their area of expertise.
- Another advantage of hierarchical structure is the sense of camaraderie which implies that in hierarchical arrangement different departments of the organization work together to fulfill a common goal this enhances the feeling departmental loyalty among the employees. The employees who work together for a united goal achievement often tends to form friendly working bonds with one another while contributing towards the common objective.
- A hierarchical organization also promotes get better execution of ideas as when there are strategically defined levels of authority and leadership strategic planning becomes much easier and effective which prevents the ideas from remaining idle.
- In hierarchical arrangements the employees are well aware of their subordinates and seniors which streamline the channelizing of communication in both upward & downward direction. This also generates a well-defined chain of command which helps in effective distribution of tasks and their better execution.
- Hierarchical arrangements present a logical reflection of functions and the individual objectives. This helps every employee to understand his role better and hence it helps in enhancing his /her performance.
- Hierarchical structures also help in maintaining the power and prestige of major functions. It follows the principle of occupational specialization.
- This sort of organizational arrangement also furnishes the means of tight control at the top level of the organization.