Dunbar’s number, which I’ve always accepted as around 200, is one of the reasons why hierarchies naturally form. If you need to manage 5,000 people, say in a corporation, it’s not possible to be on top of that many people.
But you can split them into 25 groups of 200, or smaller units, which is where you end up with executives, a whole ton of middle managers, and the much larger general workforce.