Hierarchy culture in the workplace emphasizes structure, authority, and efficiency with a clear chain of command. It defines roles, decision-making processes, and promotes stability within organizations.
By Brad Nakase, Attorney
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Throughout human history, hierarchies have served as the structural basis for society. Unsurprisingly, it has also found use in the corporate world. Organizations with a hierarchical culture use a pyramidal structure to promote efficiency and clarity.
What does it mean to have a hierarchical culture in the workplace, and how might human resources encourage some of its characteristics?
Let’s jump right in.
Corporate cultures that adhere to the hierarchical model are defined by strict adherence to established protocols and clear chain of command. Workers are aware of their reporting relationships, accountability structures, and the rules of the company.
Hierarchical cultures help businesses in the healthcare, banking, and oil & gas sectors manage risk, stay stable, and run more efficiently.
The Competing Values Framework identifies four distinct forms of corporate culture, one of which is hierarchical. This framework defines the following cultural categories:
It’s not uncommon for a corporation to have more than one culture, but in most cases, one culture will take center stage.
It’s important to pick and build an organizational framework that works for your company and your objectives. Although undergoing a cultural transition is no picnic, the payoff in improved organizational performance and increased profits is well worth the effort.
A hierarchical organization’s formal structure is characterized by defined degrees of authority and centralized control. In this type of organization, the chief executive officer (CEO) sits atop the corporate ladder, with middle management and team leaders following closely behind. The company’s decision-making process begins with senior management. Everyone from upper-level executives to entry-level workers has a role to play in meeting these decisions.
Because executives believe that higher-ranking employees are more trustworthy and apt to make good decisions, they use this method to evaluate workers based on their position in the company’s hierarchy.
Well-established procedures that facilitate efficient operation: Since management positions are more distinct, staff members are better able to comprehend the various leadership functions. Companies with a lot of employees will benefit from the hierarchical structure. There will be less room for misunderstanding and more room for cooperation if the chain of authority is clear.
A well-structured work environment with clearly defined duties and responsibilities is essential for every level of management to ensure that their staff are on the same page and hold each other to high standards.
Hierarchical cultures in the workplace rely on established norms and practices to mitigate potential threats, correct mistakes, and deal with setbacks. Such an organizational philosophy is often advantageous for businesses engaged in potentially dangerous activities, such as those in the healthcare, gas and oil, and public sector industries.
The prosperity and efficiency of an organization depend on its employees following established procedures and best practices.
In hierarchical organizations, stability and control are vital. This includes having clear directions, objectives, and expectations from those in charge. Managers provide workers with day-to-day instructions and set clear expectations, for example.
Every employee is expected to continuously adhere to the code of conduct and meet the standards set out by the organization’s values.
Armed forces
The military’s clear chain of command and established hierarchy are plain to see. Each job reports to the one above it, and people work within certain ranks. Everybody knows their job and how to advance in the company.
Major banks (such as Goldman Sachs and Wells Fargo)
Investment banks and other similar financial entities follow a hierarchical structure similar to that of the military. Every rank is important and has its own set of duties.
The author of “How to Be an Investment Banker: Recruiting, Interviewing, and Landing the Job,” Andrew Guttmann, claims that there is a distinct social hierarchy between job titles and position in banks.
An example of a hierarchical structure in investment banking in the United States might be the following: analyst, associate, vice president, senior vice president, and managing director.
Governmental bodies
To make sure everyone is doing their job, political systems make sure everyone knows their role. But bureaucracy and red tape make decisions more difficult, which could cause things to take longer than expected.
Houses of worship
Let’s consider the Church of England as an example. The Anglican hierarchy consists of the king or queen, the archbishop, the bishop, the deaneries, and the vicars. The duties and scope of each position are clearly defined.
Through education and training, these people may be able to advance in their roles.
Organizations that have clearly-defined procedures, roles, and responsibilities, as well as clear avenues for advancement, are more likely to achieve their goals. Is there anything you can do as the HR department to help spread a more hierarchical culture at your company?
Having a goal in mind will give your employees more motivation. Among the most common reasons employees quit their jobs is a lack of opportunities to advance in their careers and gain new skills.
Imagine you created a system that lays out the steps for employees to advance in the company, including coaching and training programs. That way, you’ll have a better chance of keeping them and will also be preparing your organization for the future by giving them the skills you’ll need.
Workers are better able to comprehend their place in the company’s hierarchy and the scope of their duties when they have access to up-to-date organizational charts. As a result, teamwork becomes easier.
It is also important to check that there are no loopholes or inconsistent steps in your company’s chain of command.
In the same vein, the C-suite must examine and approve all departmental goals.
In order for their team members to know what they are aiming for, good managers establish expectations. In order for workers to know what they should be doing, managers should spell out the goals and results.
That is why it is so important to establish common objectives and checkpoints along the way. That way, everyone on staff is on the same page and can take responsibility for their actions.
The pay plan is steady, predictable, and focused on the future in organizations with a hierarchical culture.
To illustrate the point, top achievers do, in fact, earn slightly different salaries. Salary increases are substantially smaller for employees who received lower performance ratings. And top performers earn a substantial raise in salary or a promotion.
How the company determines and distributes raises is based on well-defined policies and procedures. When it comes to pay and benefits, you can discriminate between different levels of personnel (employees, supervisors, upper management, etc.).
To promote order, efficiency, and uniformity, hierarchical cultures seek to eliminate room for interpretation by establishing standards and regulations based on the structure. Some may view this organizational style as outdated and inflexible, yet many businesses find that with well-defined roles and procedures, they are able to get more done in less time.
When you know what kind of company culture helps achieve your objectives, you may work to establish that culture.
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