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Hierarchy, next to centralization and formalization, is one of the dimensions of the organizational structure. It is defined as the number of levels in the organizational structure, in which the top is the most senior manager responsible for the organization's operations as a whole; on subsequent levels are the lower degrees of management.

It is worth noting that by the term hierarchical level we define each level in the organizational hierarchy, with the exception of the lowest (operational) level, which does not involve performing managerial functions. Levels of hierarchical counts from the top. At the top of the organizational hierarchy is the Managing Director, General Manager or President, on another level - its proxies, and other managers.

Essence of the hierarchy

An important element in the process of determining the hierarchical structure in organization is to establish a so-called. chain of command, i.e. such links, which describes who commands who in organization. That kind of bonds are part of a broader concept, namely the organizational links, i.e. dependency relationship between the elements of the current, necessary for implementation of the objectives of the company. In this context hierarchical bonds are often called as bonds of business, bearing in mind the relationship between subordinates and superiors. The essence of this type of bonds are the superior powers to determine the tasks of subordinates. It is, therefore, about the relationship of organizational and managerial posts in vertical view.

Above concept is closely related to two principles of construction of organizational structures, namely:

  • the principle of one-man management
  • the principle of determining the reasonable boundaries of supervision.