There is systemic fault. It starts with hierarchical structuring. It doesn't mean that hierarchies are inherently bad, but there are consequences from that and the additional things that people usually imply that come with it. This can seriously hamper productivity, for example, even in the small scale. Once you start to think that through you will also see how far reaching the agile manifesto truly is and that the content in there is nothing short of "nuclear" for typical corpo structuring and processes that are developed around it.
Question is then, why do you have both? Where does this implicit "hierarchy" come from? It is simple: As soon as you have multiple people working on a problem there are communication requirements. You can organize things in a way that they support these requirements or you can just let them figure out how to adapt their needs around some existing hierarchy. Now which one do you think is more efficient?
Hierarchies are just an organizational pattern, a tool. There are neither a religion or "set in stone" as many think, they create communication choke points, induce unnecessary communication, cause "not our responsibility" mentality that may result in things falling through the cracks, have often the "Chinese whispers" problem to it, and so on. You cannot treat every problem like a nail just because your only tool is a hammer.
> You can organize things in a way that they support these requirements or you can just let them figure out how to adapt their needs around some existing hierarchy. Now which one do you think is more efficient?
I think this is a pretty great statement of the converse of Conway's Law[1].
I'd say "in evey case". And I'd say this happens whether or not there's an explicit hierarchy. Being articulate, or having knowledge or contacts, will get you more attention. The only way to mitigate this is through explicit processes, which have to be regularly reviewed. Meetings have to be chaired strictly. Everybody has to sign-up to the agreed processes.
These processes are time-consuming, and decisions can be slow. It becomes worse the bigger the organisation. I don't know how non-hierarchical decision-making can work in an enterprise where there are significant assets at stake; I've only ever seen it work in voluntary political associations in which non-hierarchical organisation is one of the prime objectives.
Those things become inevitable when a 3rd layer of management appears (for a total of 4 layers).
I'm not sure how far you can push a 3-layered organization, but it's absolutely something that exists on some scale, without a phantom organization appearing.
