Hierarchy Culture Explained: What Is Hierarchy Culture?

Hierarchy culture, or hierarchical culture, is a type of organizational culture that emphasizes long-term stability, consistent structure, and a shared set of values throughout the entire organization. Compared to other types of company culture, the hierarchical model is designed to cultivate many years of steady, consistent output. Team members are expected to understand their duties, decisions are made on a top-down basis, and new products and initiatives roll out in a deliberate, methodical manner.

Consultants and business leaders ascribe the following traits to the hierarchical organizational culture model.

1. 1. Top-down leadership: Most hierarchical organizations are led by a chief executive officer (CEO) or company president. That person has an executive team reporting to them, and each executive oversees different company departments. A chain of command exists throughout all sectors of the company.
2. 2. Methodical decision making: In a hierarchical culture, major decisions pass through many stakeholders from workaday team members to department heads to corporate executives. This can lead to difficulty making nimble decisions, but it also serves as a guardrail against impulsive decisions.
3. 3. A focus on reliability and consistency: Hierarchical cultures are intended to provide consistency and reliability. Team members are expected to routinely meet deadlines and major events like product launches are expected to proceed steadily thanks to open lines of communication.
4. 4. Strong corporate culture: Large hierarchical organizations are designed to foster a company culture that endures beyond the tenure of any one employee. Major hierarchical organizations strive to maintain their brand identity and reputation for decades, even when the entire employee roster turns over.

Hierarchy culture is extremely popular among Fortune 500 companies. This owes in part to the model's benefits.

1. 1. Consistent company values: This type of organizational culture tends to emphasize a strong internal focus and puts a premium on naming company values, establishing a company code of conduct, and setting expectations for every team member.
2. 2. Opportunities to grow within the company: When employees can come to expect steady promotions and internal mentors, hierarchical companies provide avenues for long-time employees to succeed within the company. In well-managed hierarchical structures, team members can work their way up the corporate ladder and into management roles.
3. 3. Popular with investors: To enjoy C-corporation tax status, a business must employ a hierarchical structure where a board of directors hires a CEO, who then runs the company according to its rules of corporate governance.

Although hierarchy culture guides many of America's most enduring brands, it does pose some drawbacks compared to other organizational culture types.

1. 1. Slow-moving: Due to its top-down decision-making structure and inherently bureaucratic nature, a hierarchical organization can take a long time to make big decisions. The ad hoc model used in an adhocracy or the startup mindset found in clan cultures often leads to more nimble behavior.
2. 2. Hard to change core mission: As hard as it can be for corporate hierarchies to make regular decisions, they often have an even harder time pivoting their business. This can delay a needed adaptation to new market conditions, which makes big hierarchical organizations vulnerable to smaller startups that can change direction in far less time.
3. 3. Occupational dead ends: While some team members will be able to rise up the hierarchical ladder to assume an executive role, simple math says that most will not. This can lead some employees to a dead end within the organization—stuck in a job that no longer challenges them with no avenue for advancement. This does not happen as much in an adhocracy, where workers can jump between different project teams and matrix organizations, which keeps their work stimulating.

Business professors Robert E. Quinn and Kim S. Cameron of the University of Michigan developed a metric called the Competing Values Framework, which describes the four main types of corporate culture that exist in the world of contemporary commerce.

1. 1. Hierarchy culture: The most traditional workplace culture of the four types, hierarchy cultures value organizational structure and control with an emphasis on efficiency, uniformity, and the practice of strict procedures. They also boast a clear chain of command that separates employees from leadership. While there is less room for creativity, a hierarchy culture is intended to provide clear direction with well-defined objectives. Often such hierarchical structures exist in bureaucracies and bureaucratic culture.
2. 2. Clan culture: Organizations that have a clan culture prioritize collaboration. Clan cultures typically focus on creating a close-knit work environment where teamwork, flexibility, and discretion are valued. Clan culture is often found in small companies and startups. While it can be difficult to maintain this type of culture as an organization grows, companies that encourage a clan culture often intend to cultivate strong employee engagement and an adaptable environment.
3. 3. Market culture: The market culture is goal-oriented with a primary focus on profitability. In this results-oriented type of company, leaders typically prioritize the success of the company over internal satisfaction. Due to every aspect of a market culture being driven by numbers and tied to the bottom line, employees may find it difficult to engage meaningfully with their work, and they may experience burnout. However, this type of culture may come with stability that can lead to success and profitability.
4. 4. Adhocracy: The adhocracy culture is designed to encourage risk-taking and experimentation. This type of culture is typically valued by cutting-edge companies that hope to develop the next big innovation. Individual freedom and differentiation in the market are often key priorities. The tech industry typically values adhocracy culture, as tech companies often focus on innovation. While this culture can foster competition among employees, well-managed companies may also encourage creativity and increase motivation.

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