Hierarchy Culture: Definition, Types And Examples

Did you know? Nearly 50% of job candidates assess potential companies based on their hierarchy culture. Among the deciding factors in the application process, 46% of job applicants mentioned culture, while 88% thought it was at least somewhat relevant.

Back then, the majority was all that mattered, and workplaces were governed by fear and domination. They had it and understood how to maintain it, the people in authority. Communities were forced to follow the regulations or face penalties because they had the voice, the people’s power, and a massive backward autonomy.

Throughout the history of humanity, societies have been organized according to hierarchy culture. A company can also use it for marketing purposes. Organizational hierarchy cultures use a pyramid-like structure to achieve clarity and efficiency.

Continue reading because now it’s time to learn more about hierarchy culture, its advantages, disadvantages, and many more things. So, let’s dive in.

What is Hierarchy Culture?

We have become so accustomed to a hierarchical culture that we no longer notice them. In hierarchy cultures, processes and rules are implemented in an attempt to create a relatively fixed organizational structure, and multiple levels of power and responsibilities are introduced – such as among directors, team leaders, managers, and senior staff.

Almost every organization has a different hierarchy structure. Organizations typically use these structures to promote individuals to higher positions of responsibility. By doing this, an organization can keep moving forward in its success.

Definition of hierarchy culture: “ A type of organizational culture known as hierarchy culture, sometimes known as hierarchical culture, emphasizes long-term stability, consistent structure, and a shared set of values throughout the organization.”

Types of hierarchy culture

1. Clan culture: Work together/accomplish tasks as a group.

People in this society have a lot in common, and you get the sense that you are a huge family there. Employee loyalty and high engagement are encouraged by the leaders’ perception as father figures or mentors. Teamwork, communication, consensus, and development are the guiding principles. They emphasize nurturing and mentoring, but more importantly, they work collaboratively on everything.

2. Adhocracy culture: First, create and do.

Employees in this culture are active and innovative. They have a culture that supports innovation and encourages taking risks. Through experimentation and trying new things, the organization becomes more solid. They encourage employee freedom and initiative because the success of this business depends on the development of new goods and services. 

Change, flexibility, transformation, and inventive outputs are values that this culture considers important to success. Since this business seeks to be the first to join a market, the leaders must establish an entrepreneurial and visionary environment for it to succeed.

3. Market culture: Be competitive and move quickly

Results are what matter most in this culture. Employees are urged to compete both internally and externally to get things done, concentrate on the objectives, and achieve results. In this environment, leaders need to be both hard workers and competitors because they must be demanding and have high expectations for the staff. As they reflect the company’s performance, goals frequently relate to sales, revenues, market penetration, and stock value.

4. Hierarchy Culture: Keep control/ Do the right thing

Control and structure are common themes in this culture. Every action taken by the employees must follow clearly defined principles and procedures. Providing structure via policies and rules keeps the organization on track

Running is encouraged by leaders and organizations.  The importance of efficiency and predictability in this situation cannot be overstated. Consistency, stability, uniformity, bureaucracy, and timeliness are values that are important to these types of companies.

Organizations typically have more than one type of culture, but there is usually one dominant culture. 

Creating a structure that aligns with your business objectives and goals is essential. In spite of being a challenging change process, a cultural transformation will increase your organization’s productivity and profitability.

Why is hierarchy culture important?

The success of an organization and the general satisfaction of its employees are greatly influenced by its culture. Nowadays, a lot of workers choose the business where they feel most comfortable working. It is now more important to consider how they feel about working for the organization than just salary or location.

Business executives are in charge of creating and promoting the hierarchy culture they want for their organization. Leadership plays a significant role in changing and adapting the organization’s culture, which is not static. Leaders need to set an example once the company’s culture has been established.

The leadership’s commitment to this culture will frequently be reflected in the extrinsic and intrinsic rewards given to employees. No one approach applies to everyone in this area. Although changing or creating the appropriate culture is difficult, it is necessary for success. The company must be aware of its current situation so it can go forward.

Characteristics of hierarchy culture

In hierarchical organizational cultures, business leaders and consultants attribute several characteristics.

1. The work of people is governed by rules, policies, and roles that have been clearly defined.

Various management levels implement strict rules to ensure employees understand their responsibilities and are accountable for their actions.

Companies with hierarchical cultures follow traditions and rules to minimize risks, prevent errors, and manage failures. These types of hierarchy cultures are usually found in high-risk industries, such as oil and gas, healthcare, and government.

To be successful and productive, a company needs to comply with best practices and business processes. 

2. An organized structure with a clear hierarchy of authority and a top-down control system 

Top-down hierarchical organizations are designed with the CEO as their leader, followed by middle management, then team leaders. Decisions regarding the business are made by upper management. Whether you are a middle manager or a low-level employee, everyone has responsibilities that help to meet those decisions.

Leaders believe that experienced staff members are more reliable and are more likely to make accurate decisions when they measure employees’ performance based on their job status and hierarchy. 

3. Established procedures that enable reliable functioning

Employees are better able to understand the various levels of leadership since management roles are more defined. The hierarchy culture is ideal for big businesses. A clear distinction of command can avoid any confusion and promote more coordination.

4. The authorities must set clear goals, directions, and expectations

In hierarchy culture, control and stability are important. Managers, for example, set expectations and provide instructions to staff members on a daily basis.

Consistent commitment to company norms creates a code of conduct and creates expectations for each employee.

Examples of hierarchy culture

You have most certainly seen examples of hierarchy culture in your working life. However, in case you’re still unclear, here are a few examples of organizational hierarchies:

1. Churches

Church cultures are frequently hierarchical. For example, the monarch is the highest position in the Anglican Church, followed by the archbishop, bishops, deaneries, and then vicars.

Again, each level of the hierarchy has different responsibilities, and each person is expected to handle their responsibilities within these set limits. After gaining the necessary experience and completing the necessary training, they can move to additional levels of responsibility (as an example).

2. The military

As an example of a hierarchy culture, the military emphasizes the importance of individuals performing particular tasks or roles within a particular rank. Every rank in the military reports to its superior. Having a clear role and path to success for each individual is one of the benefits. Military hierarchies can, however, slow down decision-making.

3. Several large financial institutions

Financial organizations like investment banks function according to a rigid hierarchy, just like the military. Each level is significant and has different responsibilities.

The author of “How to Be an Investment Banker: Recruiting, Interviewing, and Landing the Job,” Andrew Guttmann, claims that rank in banks is a separate social position between job categories.

For example, the analyst job is entry-level in the US investment banking hierarchy, followed by an associate, VP, senior VP, and eventually managing director as the highest position.

4. Political systems

In political systems, the president is at the top, followed by the vice president, and so on. In the same way, the military ensures that everyone understands their role and is capable of performing well, and political systems provide the same. Despite this, such detailed hierarchy systems can make decision-making overly complex, which often delays action.

5. The e-commerce industry

Because it permits the organization to be organized into smaller teams under separate management for a more precise service that ensures attention to detail, the hierarchical structure can be beneficial for large eCommerce businesses (take Ikea as an example).

Advantages of hierarchy culture

It’s time to discuss the advantages now that you know what hierarchical culture is and have seen some examples that you can relate to.

1. Possibilities for growth and career development

Most workers aspire to grow professionally. They aspire to success and attempt to enhance their abilities and learn new things. To do this, the organization must offer opportunities for professional development. These requirements can be fulfilled by a hierarchy culture, which allows motivated and ambitious workers to develop their talents, get enough training, and take on greater responsibility.

“Every employee has some sort of career objective, but they might not know how to execute it all out,” according to Forbes. Managers need to encourage employee career development so that staff members can improve their knowledge and feel empowered while working. 

Employee retention can be improved, and overall business growth can result if managers and the organization show their support for employees’ career advancement.

2. A clear chain of command

Hierarchical structures provide members with information regarding who they report to and who reports to them. 

Communication becomes a predictable and defined process, which allows higher-ups to direct questions to the appropriate individuals. As a result, people are more likely to be aware of who has the power to assign or change duties than those who do not. 

Clearly defined sets of responsibilities are also generated by a clear chain of command. Military organizations heavily rely on this segregation of powers and authority to uphold discipline.

3. Giving people work stability

Employees who feel safe and secure in their roles—as a result of receiving their salary on time and having clear expectations—tend to remain loyal to the organizations for which they work. The requirements of employees for security and predictability can be satisfied with the help of a hierarchy culture.

“People seek to experience order, predictability, and control in their life,” according to Maslow’s Hierarchy of Needs. Both society and the family are capable of meeting these requirements. A hierarchy culture can be a great method to satisfy people’s security demands and win their loyalty to a business.

4. Expertise

Larger organizations are required to manage a wide range of diverse tasks, from marketing and purchasing to human resources and accounting. These areas of concern are divided into several specialized department configurations by the hierarchy culture. Organizations can target specific skill sets and resources through specialization to operate as effectively as possible.

Disadvantages of Hierarchy Culture

You have probably been forming your own opinions regarding the effectiveness of hierarchy culture as you read. A hierarchical organizational structure can undoubtedly have disadvantages, some of which we’ll discuss below:

1. Effective internal communication difficulties

It is challenging when you have to contact several people only to ask your employer a question. This frequently occurs in hierarchical structures. 

Typically, one can only get in touch with the boss through a specific framework. To reach the boss, for example, you might first need to speak with your team leader, who will then approach the assistant manager.

Most organizations, at some point or another, struggle with internal communication. Hierarchical cultures, however, have the potential to make it even worse. Departments or individuals may purposely suppress information in some of the worst-case scenarios. 

While under less extreme circumstances, if communication inside an organization is particularly strained, There is a chance that dissatisfaction may bubble up from beneath the surface.

2. Removes the requirement for employee and teamwork participation

When it removes the need for employee participation and collaboration, hierarchy cultures fail in another way. The work efforts of the individual are typically the foundation of hierarchical cultures. 

However, one study found that working cooperatively tends to help businesses in today’s workplace achieve more, their goals faster and provide better service.

Employee participation is less necessary in hierarchical cultures, which can make many workers feel unnoticed and unheard. 

This can even affect their sense of psychological safety within the organization, which can prevent them from questioning existing processes and putting forward original thoughts. 

One of the best methods to keep employees, raise employee engagement, and improve job satisfaction is to involve all team members in decision-making processes and to work together.

3. Businesses become rigid and incapable of adapting to change

An organization’s hierarchy culture can be extremely rigid, which is one of its greatest disadvantages. While this could be advantageous for organizations like the military, it might make firms less adaptable and inflexible in today’s modern workplace.

According to Maxine Bremner, Head of Content and Outreach at Hive19, “the rigidity of the hierarchical structure sometimes produces friction when firms need to adapt swiftly to change or fulfill marketplace demands in creative new ways.” “The Competing Values Framework first coined the phrase “Clan Culture,” in which organizations work in a more collaborative, flexible fashion, which has shown to be a beneficial way of working for us, with welfare and employee empowerment at the forefront. 

As a startup, it has helped our business grow, and it has enhanced internal procedures to increase productivity.

When it comes to bending to the needs of their employees or satisfying the demands of their customers, hierarchical structures are frequently rigid and can be slow to adapt to change. A hierarchical organization finds it difficult to adapt when these demands and needs fall outside of its typical range of activities. This can eventually lead to the downfall of the hierarchy. You can see how hierarchical cultures can become rigid by comparing this to businesses that follow an adhocracy culture, where choices are made organically, and the business can adapt and evolve swiftly.

4. Discrimination runs the risk of remaining undetected

In a perfect world, employees in a hierarchical culture organization would be selected for bonuses and promotions (thereby obtaining additional power and responsibility) based exclusively on their qualifications, but unfortunately, this rarely occurs in reality. For example, there are obvious salary differences in the UK based on ethnicity and gender, and only eight of the top 100 companies in the country had female CEOs.

If people are even able to enter the building. Recent research has demonstrated that AI can be biased, with some recruitment software solutions being proven to exclude applicants who attended women’s colleges and white associate names with being more qualified.

If an organization does have a hierarchy culture and structure, this needs to be reviewed to make sure that it doesn’t result in discrimination against people with protected characteristics who are historically and statistically disadvantaged. 

Otherwise, internalized biases can keep the company from recognizing and promoting specific employees, regardless of how talented and devoted they are, and stop them from taking advantage of fantastic chances.

Wrapping it up

To promote order, efficiency, and consistency, hierarchy cultures develop rules and norms based on the organizational structure. 

Many businesses benefit from a clear division of tasks and established processes to carry out the work in an effective manner, even though this type of structure is frequently perceived as rigid and out of date.

You can develop methods to influence the culture in a certain direction after you know what kind of organizational culture best supports your business objectives.

Frequently Asked Questions (FAQs)

1. What is the purpose of hierarchy?

Our lives are structured and regular because of hierarchies. We are given routines, duties, and responsibilities as a result of them. Sometimes we don’t realize how meaningful such things are until they’re gone.

2. How important is a hierarchy in culture?

Maintains routine and stability. Leaders aren’t everyone’s cup of tea. A hierarchical culture provides direction and is characterized by clear authority. Hierarchies need to be stable and controlled.