Hierarchy has not had its day. After 3,000 years as the preferred structure for large organizations, managerial hierarchy is still the most natural and effective organizational form that a big company can employ. Now, as in the past, the key to organizational success is individual accountability, and hierarchy preserves unambiguous accountability for getting work done. Unfortunately, hierarchy is widely misunderstood and abused. Pay grades are confused with real layers of responsibility, for example, and incompetent bosses abound. As a result, many experts now urge us to adopt group-oriented or "flat" structures. But groups are never held accountable as groups for what they do or fail to do, and groups don't have careers. The proper use of hierarchy derives from the nature of work. As organizational tasks range from simple to very complex, there are sharp jumps in the level of difficulty and responsibility. Surprisingly, people in hundreds of companies in dozens of countries agree on where these jumps take place. They are tied to an objective measure-the time span of the longest task or program assigned to each managerial role-and they occur at 3 months, 1 year, 2 years, 5 years, 10 years, and 20 years. As the time span increases, so does the level of experience, knowledge, and mental stamina required to do the work. This increasing level of mental capacity lets companies put people in jobs they can do, it allows managers to add value to the work of their subordinates, it creates hierarchical layers acceptable to everyone in the organization, and it allows employees to be evaluated by people they accept as organizational superiors. Best of all, understanding hierarchy allows organizations to set up hierarchies with no more than seven layers-often fewer-and to know what the structure is good for and how it ought to perform.

Administrative Personnel↗

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Associations and bureaucracies.

Hospitals are institutions in which private physicians admit their patients to receive care that could not be provided at home. In order to understand how the organization of such hospitals can function, it is necessary to be clear about the distinction between two types of medical practice. Health care professionals (including doctors, nurses, therapists, etc.) may engage in private practice with patients who choose to be treated by them and with whom they have a private, confidential relationship. Or they may be employed in treatment institutions (mainly hospitals) in which they provide professional services under prescription by a treating physician. In private practice, professionals are free standing. They may join associations to pursue common interests. But as members of associations, they do not work for each other, are not accountable for each others work, and are not in manager and subordinate relationships. If, however, they work for a hospital, then they become employees within a bureaucracy, working for a salary, and subordinate to a manager. The implications for physician executives are discussed, with illustrations of the types of authority that they require to have an effective working relationship with treating physicians.

Association↗