It's actually one way of making decisions and managing responsibilities. It's likely the most common because it evolved from the manufacturing-era model (think Henry Ford making cars). Ford's model evolved from looking at the military.
Ford has a famous line - “Why is it every time I ask for a pair of hands, they come with a brain attached?”
It's possible that a pair of hands that took direction would be ideal in Ford's system (though I doubt it - Honda's done much better by actually harnessing the brains connected with the pairs of hands). But that hierarchical model is counterproductive in today's knowledge and networked economy: you want to use the resources and knowledge at all levels of your company, and that way you do that is by decentralizing authority and decision-making power to the edges.
Look at the open-source model of building software; it's pretty damn far from hierarchical, and it's at least as successful at creating value compared with the more hierarchical model most software companies use.
One way of expressing America's still-unusual social flexibility is that we have many valid social structures and it is very easy to move between them; there have even been some studies on how that works. Contrast this with the other extreme of "grow up in your home small town and never leave", for instance, where there does develop a fairly strict universal hierarchy.
Glad we've finally cleared up the function of that space filling matter.
Aristotle asserted that the brain's function was to cool the blood. Later, it was asserted that it was responsible for cognitive facilities. And now, finally, we realize that its job is to fill the space in between one's ear ...
Hierarchy is generally a poor way to organize things, unless you happen to need to fill space (which is how nature uses it). If you arrive at hierarchy as a solution to a problem, you have most likely misunderstood your problem.