According to Foss and Klein, hierarchy is a response to the difficulties of building a complex organization that involves many people. Hierarchy is needed to effectively manage relationships and cooperation among workers and to keep people’s varied motives and interests aligned.
Hierarchy isn’t as simple as giving certain people command and control over others. Although it is giving power over others to some people, the purpose and extent of that power must be carefully defined.
Hierarchy establishes procedures and policies. It gives people a blueprint for managing the complexities of working together and solving problems or disputes. A satisfactorily arranged hierarchy involves not just power distribution but also provides structural support for a company’s operations.