Hierarchy

A Key Idea for Business and Society

John Child

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9781138044418
• eBook ISBN: 9781351697668
• Topic: Business
• Subtopic: Business General
• Index: Business

EURAM's Book of the Year in 2020, Hierarchy takes readers on a journey which traverses how this idea has evolved, is understood in various disciplines, and is applied in practice.

Referring a wide range of sources, the book provides an inspirational introduction to understanding what is perhaps the key idea in business and management. As a fundamental organizational principle, hierarchy is everywhere. Perhaps because of its ubiquity, the significance of hierarchy has become under-analyzed in view of the growing strains on society imposed by organizational inequality. This book analyzes the advantages and disadvantages that hierarchy brings as a form of organization, providing an accessible overview of this fundamental idea within both business and society.

This concise book provides a useful overview of existing research, for both students and scholars of business.

1

WHAT IS HIERARCHY AND WHY DOES IT MATTER?

Hierarchy is a system in which the members of an organization or society are ranked according to their status or authority. Hierarchical differences create unequal relationships between individuals and groups of people. In a general sense, any relationship in which one party is subordinated to the other may be described as hierarchical.

This book is written in the belief that hierarchy plays a crucial role in human affairs and that as a concept and practice it deserves more attention than it is generally given. As a concept, hierarchy tends to be consigned to a back seat in academic work both on organizations and on society. As a practice, attention to hierarchically-structured relations has been overshadowed in recent decades by a dominant neo-liberal focus on market transactions between organizations and a managerial emphasis on collective norms and teamwork within them. It is possible that many people have come to regard hierarchy as less relevant than in times past, coupled perhaps with a feeling that they already know enough about it. My contention, however, is that we need to revisit the knowledge we have about hierarchy for two main reasons. First, it is quite dispersed, which means that links between the organizational, economic and social aspects of hierarchy are not always sufficiently made. Second, the knowledge that we have can help us appreciate the role of hierarchy in a fast-changing world, especially how it relates to major challenges that we face today.

This introductory chapter notes how hierarchies of one kind or another pervade social systems as well as the organizations in them. It considers the nature of social and organizational hierarchies, and raises the question whether they are inevitable or immutable. This question has to be borne in mind because as well as offering some benefits, hierarchy also brings many problems. Hierarchy has become less acceptable in a world in which key knowledge no longer resides at the apex of organizational or political structures, in which upcoming generations are no longer comfortable with traditional forms of authority, and in which there is growing organized protest against the inequalities of wealth and power associated with hierarchy. The positive and negative effects of hierarchy are key issues explored in this book, as are ways in which hierarchical systems may be reformed and rendered more socially legitimate. The coverage of the book is summarized at the end of this chapter.

HIERARCHY IS PERVASIVE

Hierarchies are found everywhere in nature. Pecking orders are common among animals and birds, and wherever human beings live together hierarchies tend to emerge (Kipfer, 2001; Pfeffer, 2013). The larger that human communities are, the more extended and formal their hierarchies tend to be. They were the organizational backbones of the ancient civilizations of China and Egypt, enabling the undertaking of projects that required a massive collective effort such as building the Great Wall and the Pyramids. Today, hierarchies are intrinsic to how major institutions are organized, including governments, the military, churches and business firms. In former times, when national populations were much smaller and few large-scale organizations had developed (with notable exceptions such as the Catholic Church), hierarchies were generally defined by status distinctions and associated obligations that applied to a society as a whole. These distinctions were often based on the ownership of, and rights to use, land. In the contemporary world, formal organizations play a dominant and extensive role, and so it is organizational hierarchies that take centre stage. As organizations grow beyond the size of a primary group, they normally establish formally defined hierarchies of authority and accountability. In addition, they develop informal hierarchies of status and power as evidenced by features such as who can speak for the organization, and the distribution of dominant and deferential behaviours (Lee and Edmondson, 2017). Informal hierarchies can also be present within families and this can be reflected in the status and authority that different members enjoy within family-owned firms.

The functional principle behind hierarchy is that different levels of authority and responsibility should be distributed among an organized collection of people according to the importance or complexity of the decisions which have to be made, and the capacity of different individuals to make them. This principle has a very long historical heritage. For example, we read from the Book of Exodus (18: 25.26) that in establishing the nation of Israel, Moses

chose able men out of all Israel, and made them heads over the people, rulers of thousands, rulers of hundreds, rulers of fifties, and rulers of tens. And they judged the people at all seasons: the hard causes they brought unto Moses, but every small matter they judged themselves.

Although it plays a central role in our lives, hierarchy is not always given a corresponding degree of attention within the social science literature (Du Gay and Vikkelso, 2016). Notable exceptions include important contributions by Diefenbach (2013), Diefenbach and By (2012), Diefenbach and Sillince (2011), Anicich, Galinsky and their colleagues (e.g. Anicich et al., 2016; Magee and Galinsky, 2008), as well as some scholars who were associated with the Tavistock Institute of Human Relations (e.g. Herbst, 1976; Jaques, 1976, 1990).¹ There are several possible reasons for this relative neglect. One is that it is convenient for the power holders in organizations, who are attached to the status quo and prefer not to have hierarchy subjected to critical analysis in places like business schools which depend on their patronage. Another likely reason for the limited attention paid to hierarchy is that it is regarded as a “natural” phenomenon. In other words, it is widely taken for granted as “the ways things have to be”. Nevertheless, interest in the subject has grown recently as the role that organizational hierarchy plays in promoting inequality has become clearer and as the constraints that it can impose on change and innovation have become better understood. The negative impact hierarchy can have both on the effectiveness of organizations and on the lives of people working in them, especially at their lower levels, is stimulating critical questioning.

This questioning asks whether we should, and indeed can, change hierarchy. Historically, philosophers and theologians tended to give it a transcendental character. The origins of the term lie in the Greek hier arkhēs “sacred government or rule”, and one of its earliest meanings in the Christian world referred to a “system of orders of angels and heavenly beings”. This implies that there is an almost divinely-ordained inevitability about hierarchy. One might interpret the very ubiquity of hierarchy as meaning that it has in effect become a social institution sustained by the three “pillars” of institutions conceptualized by Scott (2014), the regulative, normative, and cognitive. So hierarchy has a structure that is regulated in the sense that it is laid down by formal definitions, rules and rituals, especially in organizations. It has a normative foundation to the extent that it has become the usual way of organizing collective activities. It has a cognitive component insofar as people accept and internalize hierarchy and do not conceive of alternatives. Its institutional embeddedness informs a conservative view of hierarchy and presents a barrier to its reform.

The alternative view is that hierarchy is very much a product of decisions made by mere mortals. In other words, that it is a social construction (Giddens, 1979). This means that it is amenable to analysis and reform based on an evidence-based evaluation. Acknowledging that hierarchy is socially constructed also raises the question of its legitimacy (Bierstedt, 1964). Hierarchy has been justified on various grounds such as collective functionality (as a rational division of labour and a means to ensure order), or supposedly natural inequalities in people’s capabilities and motivations. These justifications have today come under scrutiny. The functional deficiencies of hierarchy have become apparent in an age when innovation and adaptation are at a premium, while evidence has accumulated on how hierarchies themselves are a source of inequalities, and can impose stress and other incapacitating personal costs. The more that hierarchy is perceived to be dispensable and to impose social costs, the more its legitimacy is likely to be undermined and that there will be calls for its reform.

When hierarchies were present in early human communities, they appear to have been largely informal. They reflected the changing contours of dominance and subordination among the members, somewhat akin to the “dominance hierarchies” found among groups of animals. This simple kind of hierarchy arose from the dynamic of inter-personal relations and it could emerge within social systems that were otherwise egalitarian. So social anthropologists, who typically study small-scale and relatively simple communities, emphasize that hierarchy can develop from inequalities between persons. Such inequalities arise informally from individual attributes rather than being mandated by institutionalized social structures (Flanagan, 1989).

Later on, as societies grew in size and complexity, hierarchies tended to become institutionalized in the sense of being formalized and supported by ritual. Hereditary hierarchies and notions such as kingship emerged. Comprehensive systems of social stratification developed. These were social structures comprising multiple hierarchies of wealth, status and power, which extended to whole societies and were reproduced over considerable periods of time. There was an evolution of specialized institutions within society such as those of the economy, the military, the polity and religion, each having their own formalized organizational hierarchies. This multiplicity of hierarchies within a society embodied different sources of inequality. Some expressed economic inequalities often based on ownership, such as those between landowners, freemen and serfs. Some reflected inequalities of status such as within religious priesthoods or between castes. A third category was based on inequalities in the right to command others as in the ranks of military forces and government bureaucracies.

Hierarchies are therefore found in many different social settings where they take different forms. So despite its familiarity, hierarchy is a complex phenomenon. There is a range of criteria by which different people are deemed to occupy a higher or lower hierarchical position. Some of these criteria are more readily observable than others, while how significant they are considered to be will vary according to the social setting. Income, wealth, educational attainment and title are among the more observable and less ambiguous criteria. A more subjective and ambiguous basis for hierarchical ranking is social prestige or social status. A third stratifying factor is the level of power that people possess. Power can take various forms and, while a very real phenomenon, is difficult to pin down (Martin, 1971). In view of the complex and multidimensional nature of hierarchy, it is not surprising that there is debate over its foundations, functions and inevitability.

Within societies as a whole, the hierarchy principle is manifest in social stratification – the vertical differentiation of social groups (Bendix and Lipset, 1953). Modern societies contain a number of different systems of stratification, though one may dominate. Their foundation can be primarily economic in the case of social class, or cultural in the case of caste or traditional family status. In other words, a system of social stratification may reflect a material order when it is based primarily on wealth and power. Or it may reflect a normative order when it is justified in terms of a social group’s perceived moral worth. These foundations of social stratification find a parallel at the sub-societal level, as the bases for hierarchies within specific institutions and organizations.

While social stratification rests on inequalities between different social groups, the form that the inequalities take can vary. For example, in the political structure idealized in Plato’s Republic, the ruling Guardians were not permitted to hold personal wealth. Their position at the top of a clearly delineated structure was not based on materialism but was justified in terms of superior education and merit which equipped them to rule wisely for the general good. Another variable feature is command and subordination between hierarchical levels. Systems of social stratification also do not necessarily incorporate relations of direct command and subordination. They do in Plato’s Republic, where the vertical nature of the social structure embodies a system of top–down authority not to be tempered by the opinions of the general population (the Hoi Polloi) at the bottom. The organization of all large societies, even the so-called democracies, also normally features a strong top–down executive system. By contrast, some smaller-scale traditional societies rank their populations according to a status-based hierarchy, in which the relations between the levels are governed by differences in contribution, such as production skill, rather than by direct command (von Rueden, 2014). In theory, the relations between different social groups in a market system are also governed according to freely-entered relationships of exchange rather than those of dominance or command. Again, this is most evident in small-scale face-to-face markets.

ORGANIZATIONAL HIERARCHIES

The sheer ubiquity of organizations in modern societies lends them undeniable significance, and the hierarchies they contain are hugely consequential, not just within organizations but also in the wider society. The later chapters of this book therefore focus on organizational hierarchies. Hierarchies are generally the most clearly delineated within formal organizations which are intentionally constructed to harness collective effort towards achieving a specific goal. Business companies and institutions such as government departments, hospitals, schools and churches are prime examples. The right to exercise authority (legitimated power) is an important feature in organizational hierarchies. In this respect they contrast with status-based hierarchies that are based primarily on social prestige and which do not necessarily feature authority relationships between the people at their different levels. Organizational hierarchies are a distinctive form of vertical differentiation in which their levels combine a number of differences including decision-making authority and reward. Organizational hierarchies are also purposively designed, implying that some choice is available in how they are structured and operated. This choice is particularly interesting both for those who regard organization as a key tool of human progress, as well as for others who, by contrast, seek to modify organizational hierarchies in the hope of reducing their negative personal and social effects.

In organizational hierarchies, it is normally considered appropriate for people at higher levels to have the authority to direct those at lower levels. Throughout the history of organizations, it has been claimed that this relational inequality provides an appropriate way of coordinating and controlling the people’s activities that are different but interdependent (Witzel, 2017). One of the foundations of Scientific Management was the separation of “thinking”, as a prerogative of managers, from “doing”, which was the role of workers. Thinking clearly justifies the authority of managers to instruct workers what to do and, by implication, to earn a greater reward for doing so. We shall see later on (particularly in Chapter 4) that the imperative to manage through hierarchies is assumed to strengthen as larger numbers of people need to be coordinated and as the network of relations between them becomes more complex.

However, we cannot understand hierarchies merely in functional terms as structural frameworks for orderly decision-making, coordination and control in the organization of collective activities. They also generate systems of relationships in which power is unevenly distributed, and this has consequences. In formally defined hierarchies, such as in governmental, military and other organizations, different levels of legitimized power (“authority”) are allotted to different ranks. People at higher levels are seen to have capabilities, responsibilities or other indications of value that are superior to those of people at the levels below them. Informally defined status hierarchies may also be present...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Table of Contents
• Acknowledgements
• 1. What is hierarchy and why does it matter?
• PART I: Hierarchy in society at large
• PART II: Hierarchy in organizations
• PART III: The case for reform
• Index