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  The Ups and Downs of Managing Hierarchies  Premium

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Having a well-defined hierarchy can contribute to organizational effectiveness: it helps people know who does what, when and how, and promotes efficient interactions by setting clear expectations for the behaviors of people of different ranks. This is especially true when people feel under threat, helping to restore a sense of order and control. However, sometimes hierarchy can hurt as much as it helps. In complex, dynamic situations, leaders need access to the most complete and varied information to make the best decisions. During such times, hierarchy can be catastrophic if it suppresses the voices of lower ranking members. In this article, the authors provide insight into how to harness the benefits of hierarchy while mitigating its downsides. Armed with this knowledge, managers can create hierarchies that lead to victory with the fewest casualties along the way.

Tools and Frameworks:

> "Making Hierarchy Work" summarizes how and when to use hierarchy to be successful.
> "How to Build Trust" provides tips to build psychologically safe environments where team members feel encouraged to speak up and share ideas.

Examples Cited:
Zappos, Tony Hsieh, beehive, Jimmy Carter, Miami Heat basketball team, LeBron James, Chris Bosh, Dwyane Wade, Wall Street, 2008 global financial crisis, housing bubble, American International Group, AIG, Joe Cassano, Alan Greenspan, Ben Bernanke, climbing Mount Everest, Johns Hopkins Hospital, surgeon in the operating room

Research Basis:
Based on research contained in the authors' book, Friend & Foe: When to Cooperate, When to Compete and How to Succeed at Both (New York: Crown Business, 2015).

About the Authors:
Adam Galinsky is the Vikram S. Pandit Professor of Business and Chair of the Management Division at Columbia Business School, Columbia University.

Maurice Schweitzer is the Cecilia Yen Koo Professor of Operations, Information and Decisions at the Wharton School, University of Pennsylvania.
This article is based on:  The Ups and Downs of Managing Hierarchies
Publisher:  IESE
Year:  2015
Language:  English