Organizational Hierarchy: Structure, Levels, and Span of Control

Understanding Organizational Hierarchy

Hierarchy arises when managers struggle to coordinate and motivate their subordinates. Based on levels of hierarchy, the organization can be divided into:

• Vertical Organization: The hierarchy has many levels relative to the total size.
• Horizontal Organization: The hierarchy has few levels relative to the total size.

Relationship Between Size and Height of Vertical Hierarchy

Once a certain limit is exceeded, the growth of the hierarchy becomes less than proportional to the growth of the organization’s size. Due to this relationship, the chosen hierarchical structure is typically pyramidal, with a decreasing number of managers at each successive level. Choosing the right number of managers and hierarchical levels is important because this decision affects organizational effectiveness.

Problems Caused by Hierarchy

Communication Problems (Longer Chain of Command)

This leads to:

• Increased time for information to flow.
• Distortion of information.
• Managers manipulating information to serve their own interests.
• Slower decision-making processes.

Motivation Problems

As the number of hierarchical levels increases, the authority and responsibility of each manager decreases. Managers in a flat organization have more authority.

Bureaucratic Costs

The more hierarchical levels there are, the higher the management costs. During the growth phase of an organization, managers tend to focus solely on satisfying customer needs, and the number of levels increases. When an organization reaches maturity, its structure tends to be streamlined.

Parkinson’s Law Problem

Managers are deeply concerned with their hierarchical status; the bigger their "empire", the higher their status. Each manager seeks to have more subordinates to avoid losing authority due to too many hierarchical levels.

Zenon’s Paradox of Infinite Coordination

If a new role is created to manage several offices, it may become necessary to introduce an additional role to link this manager with the offices—potentially creating an endless chain of coordination.

Span of Control

This refers to how many people report to a manager or supervisor. If the span of control increases with the number of employees, the number of managers and hierarchical levels does not increase proportionally. Instead:

• Each manager oversees more subordinates.
• The organization compensates for the lack of new levels with an expanded span of control.

Factors Affecting Span of Control

• Task Complexity: When subordinates’ tasks are complex and varied, the span of control must be small; if tasks are routine, it can be wider.
• Task Interdependence: When tasks are interrelated, coordination becomes difficult; if tasks are independent, the span of control can be increased.