Members of hierarchical organizational structures mainly communicate with their immediate superior and with their immediate subordinates. Structuring organizations in this way is useful partly because it can reduce the communication overhead by limiting information flow.
An organization tree is a way of representing the hierarchical nature of reporting. Every Employee in the organization, except one, is a subordinate to an other Employee. In an organization, the hierarchy usually consists of a singular/group of power at the top with subsequent levels of power beneath them.