Benefits of Applying Hierarchy Culture in the Company

Ngoc Anh Luong
Ngoc Anh Luong
Head of Digital Marketing at traicie - The best AI-powered talent sourcing tool for recruiters
Table of contents

Many large organizations’ core structure is hierarchical. This structure translates into a focus on productivity and well-informed operations. After the Covid pandemic, remote work has grown in popularity and clear points of contact ensure that daily operations are easily kept on track. However, a hierarchical culture also has its disadvantages and may not be best suited for smaller businesses or start-ups, without fixed structures.

If you’re thinking about changing the culture of your business, this article might be the one for you. We will help you define its pros and cons to help you decide if this kind of structure suits your company.

What is a Hierarchy Company Culture?

What is a Hierarchy Company Culture?

In the Competing Values Framework, the Hierarchy Company Culture is one of the four main types of organizational cultures:

  • Adhocracy culture (Create)
  • Clan culture (Collaborate)
  • Hierarchy culture (Control)
  • Market culture (Compete)

A Hierarchy Company Culture follows a traditional, top-down structure. This culture is one of the most common and typical structures found in governmental and large organizations.

Hierarchy Company culture was a big hit in the 1900s, and it has helped corporate workplaces, like the investment firm Goldman Sachs, be more efficient, consistent, and stable over the years.

A Hierarchy Company Culture is popular because it clarifies rules, accountability, procedures, authority, and decision-making. There are many levels of management, and employees would go through many doors to reach top management. 

Usually, a hierarchical work culture can lead to reliability and smooth production. However, if the business has many layers of management, making decisions and changes can be relatively slow. 

In the case of today’s economy, which is full of ups and downs, employees may feel like they are victims of too much red tape.

Do you want to switch to a Hierarchy Company Culture?

When companies transform into a hierarchical culture, they focus more on procedures and processes.

Moving towards a hierarchical company culture requires the implementation of organization and clear processes within the organization. It becomes more important that processes are followed and employees should move away from last-minute solutions and “go with the flow”.

Benefits of a Hierarchy Culture

Hierarchy Culture

 

A transparent chain of command and clear accountability

In a structure with levels, everyone knows where they stand, who they answer to, and who responds to them. This can be important for ensuring employees are satisfied with their jobs, giving them room to grow professionally, and offering them a sense of ownership over their roles.

Opportunities to grow and move up in your career

All people want is to improve in their profession, whether this is climbing up the career ladder or improving their field knowledge. They aim to improve their work, learn new things, and perform their best. However, to encourage employees to improve their skills, get the proper training, and take on more responsibility.

Forbes stated, “Every worker has a plan for their career, but they might not know how to make it happen. It’s up to the managers to guide their employees so that they can improve their skills and stay motivated at work.”

Giving people job security

Maslow’s Hierarchy of Needs indicates that “People want their lives to have order, predictability, and control. The family and the company should meet these needs.”

A hierarchical structure can be an excellent way for a company to meet people’s security needs and win their loyalty.

|>>> Read more: Culture-based Recruiting: Why is it the best approach?

Drawbacks of a Hierarchy Culture

Workplace hierarchies are not always effective. Common disadvantages of hierarchy culture include:

Complicated chains of command can slow down decision-making

Inconsistencies in management at different levels can impede work. As a result, the delays in communicating vertically through the levels and horizontally between teams would cause more pending decisions and confusion in reporting. 

A disconnection between lower and upper management

In the case of a hierarchy culture, there usually appears a disconnection of employees from top-level management. Consequently, the company would face a strain on the employee-manager relationship due to a lack of autonomy. 

 

Considerable amount of corporate overhead to support the many management layers

Generally, building company culture is a complex procedure. Strategies should be put in the right place to deal with the challenges that are likely to occur under this structure. Managers should have a look at the decentralised organizational structure model – one in which senior management assigns the authority for limited decision-making to lower levels in the organization. We highly recommend you read about the decentralized organization structure when aiming to build the Hierarchy Culture in the workplace.

Examples of a Hierarchy Culture

Examples of Hierarchy Culture

Examples of Hierarchy Culture

1. The armed forces

The military is an excellent example of a hierarchy culture because everyone works to do specific jobs or roles based on their rank.

Each rank in the military answers to the level above it. One benefit is that each person has a clear role and path to success. 

2. E-commerce businesses

The hierarchical aspect also works well for large E-Commerce businesses like Amazon since it breaks up the company into smaller teams managed by different people.

3. Governmental departments

Like the military, political systems ensure that everyone knows what to do and can do it well.

4. Churches

Churches tend to have cultures with levels of power. In the Anglican Church, for example, the Monarch is at the top, followed by the Archbishop, the Bishops, the Deaneries, and the Vicars.

Again, each level of the hierarchy has its own set of responsibilities, and people have to do their jobs within these limits. When they have gained the right experience and finished the proper training, they may be given more responsibility.  

Conclusion

Companies with hierarchical cultures follow the traditional corporate structure. These companies try to keep things organized by having a transparent chain of command and more than one management level between employees and leadership.

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