Reviewing the Standard Corporate Hierarchy – Asrar Qureshi’s Blog Post #1036

Reviewing the Standard Corporate Hierarchy – Asrar Qureshi’s Blog Post #1036

Dear Colleagues! This is Asrar Qureshi’s Blog Post #1036 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to aq.pharmaveterans@gmail.com for publishing our contributions here.

Credit: Kampus Production

Credit: Mikhail Nilov

Credit: Yan Krukau

Preamble

Layer upon layer is the standard team structure that has been around for decades or even centuries. As far as I have been able to understand, the hierarchy was established centuries ago as the communities and tribes formed. Someone was appointed Tribal Chief whose job was to command everyone else. More senior positions like Tribal Elders were created to accommodate more aspiring candidates. Then spiritual leaders and Shamans claimed to be among the seniors and were accepted. The same sense of hierarchy has been prevailing ever since, in every corporate. 

Organizations are built in vertical manner, the lowliest person at the bottom, and the highest at the top. Authority is vested in the top few layers only. Everyone else must follow them. 

In recent years, tech-based companies like Google, Meta, and Netflix are experimenting with doing away with the traditional hierarchical model and redistributing authority more evenly and horizontally. Bayer, the crop sciences giant and a well-known pharma company, last year went for radical decentralization. The jury is still out on how beneficial it is because more time is needed to analyze its pros and cons.

This post is a discourse on the subject and invites open discussion.

Arguments in Favor of Formal Hierarchy

The biggest argument is that it is a time-tested system with proven benefits and reliable outcomes. Since it has been working with dependable and predictable benefits, there is no point in thinking about changing it.

The second big argument is that the entire world has been designed in a hierarchical manner, and over time, acceptance and following hierarchy has gotten into our genes. If we find hierarchy missing, we feel lost. It is almost universal observation that if formal hierarchy is not found by a group of individuals, they will unconsciously regroup to create informal hierarchy. It is seen even among the group of friends when they go out socially; one person automatically takes lead and others follow without minding it, rather they accept happily.

People need to understand their boundaries to function properly. If they are given an open field, they may freeze or they may get distracted or may even be completely lost. The hierarchy with clear boundaries, job expectations, receiving orders and approvals from above, makes people focused and safe to act.

Decentralization, or flattening the organization is a huge task which will uproot the entire structure built painstakingly over the years. The organization will suffer seriously and will lose customers and business. Even its survival may be threatened by such fundamental change. The risks are real, but the benefits are imaginary at this stage. Unless decentralization is adopted widely, and its benefits become clearly understood, the organization must not attempt this.

In short, the case for keeping formal hierarchy is foolproof and must continue. 

Arguments Against Formal Hierarchy

Formal hierarchy, like it works now, fixes the individuals in the hierarchical slots, disregarding their capability and potential. Their job assignment, their goals, and the expectations from them are based on where they are in the structure. This is clear discrimination against people based on position. It is not uncommon to hire a person at a position lower than his/her previous one saying that we only have this position to fit you in. This is the shackle of hierarchy. During initial years of my career, when I had worked for an MNC for four years already, I was interviewed by the top boss of another MNC for the same position as my previous one. He selected me but offered me 25% of my last drawn salary, saying that ‘hamare paas tu aap naye hein’ (but you are still new with us). It is a counterintuitive approach, but it still prevails everywhere.

Hierarchy defines the compensation and benefits. The salary band, allowances, car, parling space, are all based on hierarchy. You must get to the next cadre to enjoy more benefits. Performance is important for progress, but many a times, other intangible factors are added to justify out-of-line promotions. The boss’s decision is final and binding and shall be implemented and accepted. There are numerous cases, in which employees feel frustrated and become actively disengaged or leave the organization; both causing loss to the organization. 

Hierarchy has created struggle to reach higher and higher by hook or by crook. The usual advice is to find a sponsor, a highly placed person in the organization, cultivate him through whatever means, and use him to progress more rapidly, superseding others, not on merit but on the strength of sponsorship. The competitiveness has become ugly over time, and more and more people are now engaged in dubious means to achieve more.

The people now joining the workforce are all coming from Generation Z, who is more sensitive about independence, space for performance and opportunity for performance. They feel stifled with ironclad hierarchical structure and are becoming the largest group of disengaged employees. Some are still struggling to make their voices heard, others have become quiet.

Decision making is limited to the upper layer(s) only. Others are neither consulted nor taken into confidence about what is cooking. It is quite likely that some of them may come up with ideas which will give fresh view and bring new benefits. However, in the current system, this opportunity does not arise.

Sum Up

This is not an exhaustive list of arguments for and against formal, standard hierarchy. Many more can be added on either side. In the final analysis, the standard hierarchy may not be completely outdated and may not be discarded totally. In the next post, we shall see the benefits of a flatter hierarchy, what challenges it may pose, and how it may be rolled out.

Concluded.

Disclaimers: Pictures in these blogs are taken from free resources at Pexels, Pixabay, Unsplash, and Google. Credit is given where available. If a copyright claim is lodged, we shall remove the picture with appropriate regrets.

For most blogs, I research from several sources which are open to public. Their links are mentioned under references. There is no intent to infringe upon anyone’s copyrights. If, however, it happens unintentionally, I offer my sincere regrets.