I have already mentioned factors, which should be considered for construction of management ladder, in my article “Art of building hierarchies”.  Certainly, these are just general ideas regarding the creation of effective management systems. Now let us consider what we should not do during the process of creation or reconstruction of company’s management tree and what “diseases” management hierarchies may have.   For this let us take a look at the given qualifier of the main defects of administrative management ladder.
 
So, ¹ 1 here is double subordination. A good example of this is when one employee has to submit to two chiefs (nominally or actually). On the one hand, this variant implies a perfect opportunity for the employee to hide his divergence, getting covered by mutual instructions of both chiefs, and to simulate high and almost uncontrollable activity. However, on the other hand, in such situation an extra charge of a disciplined and fair employee may provoke depression symptoms, that result in the fact the employee can no longer cope with all the instructions (a physical extra charge). Consequently, the employee simply does not have enough time to manage with all his work, and his nervousness and possible punishment can force him to resign from his position in division or even to leave the company, that may have a bad effect on all the company’s activity.
 
¹ 2 here is an asymmetric subordination in regard to the field of activity, which can be illustrated by the situation with the chief and his subordinate responsible for different directions of the company’s activity. In this situation it may be difficult to determine the tasks and business processes the subordinate is responsible for. Interrelations between the chief and his subordinate are often unclear and complex, being characterized by mutual claims and full misunderstanding of orders by the subordinate and of their execution by the chief. (It is enough to imagine the main programmer instructing the cook). In some circumstances unscrupulous bosses can use such situation in their favor trying to gain over resources. The employee seems to deal with problems of one division (with certain budget allotted), while actually he solves the problems of another division (on the expenses of the previously-mentioned division). Thus, the company faces latent squandering of resources in activity field 2, which in case of high importance of the latter may represent a great danger for the company.
 
¹ 3 illustrates a person in a dallying position, i.e. the position of submitting to nobody, a free resource, acting on his own will, who creates tasks and solves them himself. It is not that bad if in such situation the employee is not simply the balance and if there are vacant positions, which he can occupy. Theoretically, it is certainly impossible to submit to nobody, while such subordination is just nominal with the employee carrying out any tasks (even floor cleaning). This case can be characterized as some kind of " warehouse stock of employees ". Being aware of all the company’s affairs, such employee can always (or nearly always) be assigned to any vacant position, offering a good alternative to the search of employee on the side. However, having too much “dallying employees” is a signal of danger, as such ballast can ruin the company. There should be measure in everything.
 
¹ 4 illustrates gaining over resources regarding the field of activity (resource asymmetry). The situation here is similar to ¹ 2 with the only difference that here the chief controls two or even more fields of activity at the same time (quite often this situation occurs in IT departments lacking professional managers of the top level). I also call it principle of a bay leaf – you can throw it away, but still you need it for cooking. So, we come across some kind of “attachment” of such divisions to any other divisions possible. Consequently, we see financial, human and administrative resources flow from field 1 into field 2. As a result, field of activity 1 gets bear and degenerates due to redistribution of resources, due to incompetent work teams and to misunderstanding of specific points of professional activity. This can lead either to non-functioning of field 1 or to its long inefficient work, which represents a certain danger to the company.
 
¹ 5 represents jumping overhead with a double subordination. The main principle of this model is “The vassal of my vassal is also my own vassal”. Here we may come across direct intrigues and talks. On the one hand, having a direct access to the top boss, an employee does not have to break the subordination in order to complain to him. However, on the other hand, the situation when boss 2 and boss 1 give contradicting orders may lead to crisis of decision-making. In this situation the direct executor cannot carry out mutually contradicting orders. Further on, this deformation can develop in an unpredictable way, and may even require the restructuring of management of large divisions, that can be rather harmful for the whole company.
 
All the phenomena mentioned above are rather dangerous first of all due to the fact that they stimulate parallel structures, which in their turn can result in the management crash. Here I recollect the Peter’s principle describing why things go wrong. Incompetent associates frequently provoke such cases – small fish survives easier in muddy water. As you can see from the diagram, all the presented deformations allow skillful concealing of incompetence, and the analysis of deformations and of developed and properly carried out measures on their localization and elimination will allow to create an efficient management system.
 
To diagnose condition of management hierarchy of the company we will need two schemes: a structural scheme of management at the level of fields of activity, corresponding vacancies and problems (tasks) being solved, as well as staff schedule with binding to the management structure. The dispute what we should reduce at restructuring of management is as old as the dispute of what was primarily: the hen or the egg. As usual, the truth lies somewhere in the middle. It is most likely, that the management structure of the company can be modified according to requirements of active and professional associates devoted to the common work. However, in case of ordinary employees, their opinion can be neglected, and the restructuring of the company should be guided by management efficiency.

Last modified: 15.06.2003
Translation by Elena Polyanskaya