An effective hierarchy makes leaders accountable for results, and provisions for their replacing failures with someone new — sometimes through internal promotion. That's how hierarchy ultimately serve the success of the organisation as whole — including owners, managers, and employees.

What is hierarchy and why is it important?

A company's hierarchy allows employees on different levels to identify the chain of command and serves as a reference point for decision making. A company without a hierarchy cannot effectively hold its executives, managers and employees accountable.

What is the purpose of hierarchy?

Hierarchies add structure and regularity to our lives. They give us routines, duties, and responsibilities. We may not realize that we need such things until we lose them.