In this article an optimal structure for organizational hierarchy of strata which will promote efficiency and avoid difficulties is defined and explained. Most companies today suffer from having too many levels in their managerial lines of command, as of September 1965. It is not uncommon to find as many as twelve to eighteen levels in the very large corporations, between the top board and shop and office floor. The effects of having too many levels are familiar enough. Lines of communication are too long, and instructions lose their steam. Bypassing becomes the natural order of things. Managers and immediate subordinates get in each other's hair. The number of levels that an organization should have can be decided by principle. How many levels there should be is not just a matter of personal taste or outlook. Seven levels in all are sufficient to manage the very largest of corporations, with correspondingly fewer for smaller organizations. These seven levels of organization arise from the fact that there are seven distinguishable levels of capacity groupings among the members of any large population. These level-of-capacity groups set the mold for organization and explain why the hierarchical form of organization is available for the division of labor by vertical delegation.