Hierarchical Organisation

Marketing dictionary

Hierarchical Organisation

A classic form of organisation which, during the 19th century, was adapted by business from centuries-old religious and military organisations. In this type of organisation, authority flows from the person in charge through various levels of supervision (called "chain of command" by the military). Conversely, information and requests for guidance and decisions travel upward through the same channels. Few, if any, modern business organisations follow this strict organisational structure. Rather, they delegate much decision making to lower levels of management. When top management needs to be involved, modern techniques for information processing enable top and lower levels of management to communicate quickly. Decisions are often made during discussions via telecommunications. Comment: Some business media continue to describe business organisations as if they operated in the outdated classical hierarchical manner. It is true that business organisation charts often follow the hierarchical pyramid design even though they operate in the less formal manner described above. The formal organisation chart shows the corporate management structure that is responsible to government and stockholders for fiduciary, fiscal, and legal requirements. The line of authority from the top down enables top management to ensure that its legal and ethical policies are promulgated and followed. Source: AMA

Back to previous
Rate this term


Browse A-Z

Select a letter to find terms listed alphabetically.