A Methodology to Measure the Hierarchical Degree of Formal Organizations

Abstract

Hierarchy is a fundamental phenomenon in management and organization science, a phenomenon which has marked the evolution of human societies over centuries. Among the many studies on this issue, the ones that adopt a formal approach of investigation are mainly based on social network analysis. Following this line, in this work we focus on organization distribution of formal direct authority in stylized, pure hierarchical archetypes. Past research, analyzing the share of asymmetric links in out-tree topologies, was not able to distinguish among different types of out-trees. Indeed since the out-trees can differ under substantial structural features, in order to measure the degree of hierarchy it is necessary to employ indicators of power concentration and distribution. Results show that the purest archetype of hierarchy is the star form, and not the typical org chart. Further, ceteris paribus, an organization with more hierarchical levels is less and not more hierarchical than an organization with fewer levels. Moreover, power tend to concentrate in lower levels, and especially into the penultimate one.