The twentieth century witnessed the emergence of bureaucratic managerial hierarchies from Big Chief organizations. Business conditions, including new technologies and production methods , increased the complexity of the business environments so much that large corporations were forced into becoming hierarchical organizations. Military and religious organizations possessed hierarchical structures prior to this, but the Big Chief mentality dominated, without any consistent managerial roles. It was the relatively recent invention of bureaucracy that gave modern hierarchical organizations their distinct structure and their new managerial mind-set .
In 1911, Frederick W. Taylor published The Principles of Scientific Management , a monumental text that almost by itself created the managerial business enterprise. Borrowing the empirical method from science, Taylor and others applied observation, classification, and measurement of work to management and created the perfect mechanistic organization. Despite the inaccuracies of the Newtonian-Cartesian scientific worldview and the management model it inspired, we must not fail to appreciate the incredible progress that was made possible by Newton's achievement in science and Taylor's achievement in business management.
The hierarchical structure of business organizations was not a mistake based on faulty science, but rather the natural next phase of organizational life given the increased energy flow and complexity of the industrial revolution. Of course, what was to cause problems was the myth of leadership gaining wide acceptance at the same time. But to call Newton's scientific breakthrough dogmatic and repressive, as some people do, completely misreads the history of both science and culture.
Nevertheless, today most companies have a pyramidal organizational chart. They're built up from functionally oriented work groups such as sales, manufacturing, finance, human resources, and so forth. Superimposed on these functional specialties might be some type of matrix command structure based on individual products, strategic business units, or geography. Usually a functional dominance prevails, which has the tendency to create walls between people in companies, along with boundaries and chronic conflict. Nevertheless, many people feel safe working in a hierarchy ”it is an organizational form that seems to offer great security and comfort . In the hierarchical organization we're told what to do, so individually the risk level appears low. In many ways, though, even the CEO isn't really free. The dynamics of the whole overwhelm the agency of the parts, even the "executive" parts .
Even a leader with good intentions will be trumped by the system if she doesn't understand it. Attempting to delegate some aspect of decision making to others or to a team without understanding the systems and processes of rank-based thinking will lead the manager to act in a way that nullifies the prior act of delegation. While teamwork is effective here, teams will not function very well within the hierarchical organization. Even with a benevolent autocrat, given the expectations of unilateral power, most employees will adopt a strategy of compliance and make themselves dependent on their manager. This makes deliberate top-down, rank-based management structures very time consuming at a time when business conditions necessitate quick responses.