Rank Rules!

By Sean Gregory

Management gurus have forecast the end of organizational hierarchies for decades. In an era of cascading technology and shifting social attitudes, they say, firms will turn into "communities," "horizontal structures" and other egalitarian forms. Nice buzzwords, but not reality, says Stanford Business School professor Harold J. Leavitt in Top Down: Why Hierarchies Are Here to Stay and How to Manage Them More Effectively. Sure, Leavitt writes, hierarchies breed "infantilizing dependency that generates distrust, conflict, toadying, territoriality, backstabbing, distorted communication and most of the other ailments that plague every large organization." But they persist because compared with the alternatives, they are quite efficient and offer goal-oriented workers an achievement ladder to climb. The book has lessons for middle managers who serve both the CEO and subordinates. One tip: seek informal power structures. Leavitt once worked with managers who wouldn't act until they talked to a guy named Joe. Who was Joe? The CEO's chauffeur. --By Sean Gregory