Essay on Business Hierarchy Merits and Demerits

The question of whether or not a hierarchical structure is appropriate for particular businesses and organizations and not others remain an issue at the center of the back and forth discussions between employees and employers likewise. Is it necessary for an organization to adopt the idea of business hierarchy or is it just another misconception that people have of the benefits that come along with the adoption of a business hierarchy structure? Business hierarchy entails the process through which commands and directions have to follow from the highest possible to the lowest ranks in an organization. For instance, in a typical organization, directives are made at the managerial level which consists of Chief Executives and flows down to the assistants, head of departments, supervisors, to the lowest ranking employees (Ashkenas, Ulrich, Jick, & Kerr, 2015). Many professionals are always against the idea of business and organizational hierarchies for the implied adverse effects that it poses to their overall output. With efforts directed towards having flatter organizations, the concept of corporate hierarchy seems to be getting a considerable amount of bad rap. But is it as bad as it's made to appear? The appropriateness of business hierarchy largely depends on the structure of a particular business or organization.

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Merits of Business Hierarchy

Organizational hierarchy is particularly beneficial to the employees as it serves to make them know of the positions that they hold in an organization and what is expected of them. By reading from the hierarchical org chart, they can, therefore, be conversant with where they fit in the bigger picture of the business and understand their respective roles. In case an employee wishes to be promoted, an idea of the structure of the organization they are working for will enable him/ her know the input required for them to reach such a position. They, therefore, will be pushing towards that goal as it will be clearer compared to an organization that does not have a structure and hierarchy to work with. With that, communication becomes more efficient since everyone knows their position in the organization. For instance, it becomes easier when one reaches out to the marketing manager when they want to talk to someone in the marketing department rather than reaching out to every employee in the marketing department simply because of unclear roles and positions held (Egeberg, 2007).

Another advantage of having a well laid down structure in an organization or business is an improvement in the performance of the employees. Companies with some sense of structure are likely to perform better compared to those that lack regarding business structure and hierarchy. A solid hierarchy enables employees to concentrate on their specified tasks thus eliminating any possible confusion that may arise with regards to their roles. Consequently, they are able to sharpen their skills in a given field with a succinct focus of the goal that they desire to achieve. When developing an organizational structure, employees falling under given job categories are usually grouped together. Such an arrangement enables the manager to conveniently coordinate their efforts to enable the organization to achieve a greater effect (Zheng, Yang, & McLean, 2010). These groupings thus set a clear stage for efficient business/ organizational operations and cost reductions through economies of scale.

Demerits of Business Hierarchy

Business hierarchies can also be disadvantageous especially when they are structured in the traditional sense that does not allow for the employee's voices and grievances to be heard and addressed. In such settings, employees at the bottom of the pyramid feel isolated and detached from the business or organization since they feel like they are totally left out when it comes to making decisions that concern them. This stifles the experiences of such employees and results in a lack of control and power over their duties and situations. Their potential is thus substantially undermined as they feel less valuable. The consequence would then be poor business or organizational performance due to stifled communication between employees from different departments (Argyres & Silverman, 2004).

Centralization of powers, a primary characteristic of a hierarchical structure, can prove detrimental, especially to small business owners. These proprietors are tasked with the responsibility of overseeing all the operations of their businesses losing focus of the bigger picture that involves the growth of their businesses. That is because they are usually caught up in the day-to-day running of their enterprises, tasks which should be left to be handled by those who are closer to the situation while they concentrate on providing leadership and guidance. In large organizations, hierarchical structures mean bureaucracies that slow down communication, decision making, and action processes making these organizations become lumbering as opposed to spray entities (Chan, 2002). In dynamic businesses requiring quick actions, bureaucracies prove destructive as demands and requests are usually not met on time.

The best solution perhaps remains that of creating a "flatter" hierarchical structure which is not as pyramid as the traditional structure, and neither is it as linear as what would be the case in a flat organizational structure. A flatter structure falls in between as it possesses some form of structure but still allows employees the freedom and space to innovate and be part of the decision-making process. Such a structure gets rid of the red tape and the layers which are not necessary as it allows even the lowest ranking employee to communicate with the executive leading to improved organizational performance. Either way, a hierarchical structure is not as bad as it's perceived as long as it's implemented correctly and for all the right reasons.

References

Argyres, N. S., & Silverman, B. S. (2004). R&D, organization structure, and the development of corporate technological knowledge. Strategic Management Journal, 25(89), 929-958.

Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (2015). The boundaryless organization: Breaking the chains of organizational structure. John Wiley & Sons.

Chan, Y. E. (2002). Why havent we mastered alignment? The importance of the informal organization structure. MIS Quarterly executive, 1(2), 97-112.

Egeberg, M. (2007). How bureaucratic structure matters: An organizational perspective. Tradition and Public Administration. Basingstoke: Palgrave-MacMillan, 77-87.

Zheng, W., Yang, B., & McLean, G. N. (2010). Linking organizational culture, structure, strategy, and organizational effectiveness: Mediating role of knowledge management. Journal of Business research, 63(7), 763-771.