What Functions Does Hierarchical Control Play in Firms/organisations?

Introduction

Most of the businesses are established with a view to make and maximize the profits of their shareholders and owners. Businesses normally involve owners, managers and subordinates. The managers control the subordinates in order to carry out the day to day running of the business. Hierarchy is the way in which the organisational management structure has been established. Hierarchy, in other words, is the way in which the management of the business is formed and control is exercised. The term hierarchical control defines the control which moves down from the top management’s control over to the bottom line workers of the company. There are several management levels which are decided and organized in order to create a more comprehensible organisational structure. Managers at each management level have control over the employees who are working directly under their surveillance. Organisations normally design organisational charts to show the structure of the organisation, levels of management and easy structure of the employees working under the control of each manager (Reyazuddin 2010; Stokes 2002; Sisk 1973).

Hierarchal Control

Businesses are aimed to maximize the wealth of the shareholders. To pursue this goal the business activities are divided and the control is also spitted up to ensure that the work performance at each level of management is up to the standards. The hierarchical control enable the organisation to improve the efficiency of the business’s overall performance as the manager at each level of management is responsible and answerable for the performance of his division or workers working under his control. In order to improve his/her performance, managers put their best efforts to improve the work efficiency and quality at their level. Their efforts may be biased and may be aimed at the achievement of their personal interests but the result of those efforts, normally, helps in improving the business’s efficiency. Hence, we may say that hierarchical control helps organisations in achieving their major aim of maximizing profits i.e. by improving efficiency and quality of work.

Hierarchical control provides the basis of coordination between employees. A number of people are involved in the running of the business. There is a need to control the operations of the business and control the operating activities that are performed by different individuals. The hierarchical control helps in identifying the place, position and responsibilities of each individual. The hierarchical chart provides the basic understanding of who is responsible for a particular work and to whom is that individual accountable. Hierarchical control plays a vital role in keeping the organisation knitted and its operations controlled. The hierarchical management is provided fixed tasks and targets at each level. The work of one department, normally, does