I suppose Zaxo's code won't work for you, because you used the array to describe a nested structure with sub-departments and such. In general, if you describe nested structures, use nested structures.
Have a look at the following code; I think it should solve your problem: 
#!perl

use strict;
use warnings;

sub returnParsed {
   my ($array, $index, $level) = @_;
   my $levelhash = {};
   while ($index < @$array) {
      last if ($array->[$index]->{'level'} < $level);
      if ($array->[$index]->{'level'} == $level) {
         $levelhash->{$array->[$index]->{'department'}}
            = returnParsed($array, $index + 1, $level + 1);
      }
      ++$index;
   }
   return $levelhash;
}

sub dumpSorted {
   my ($structure, $indent, $startindent) = @_;
   my $dumped = '';
   for (sort keys %$structure) {
      $dumped .= " " x $startindent . "$_\n";
      $dumped .= dumpSorted($structure->{$_}, $indent, $startindent + 
+$indent);
   }
   return $dumped;
}

my  @array = ({ level => 1, department => 'Office of President', },
{ level => 2, department => 'Recruiting', },
{ level => 2, department => 'Software', },
{ level => 3, department => 'MIS', },
{ level => 3, department => 'System Operations', },
{ level => 2, department => 'Pipe line', },
);

print dumpSorted(returnParsed(\@array, 0, 1), 3, 3);

[download]
Hope this helped.
CombatSquirrel.
Entropy is the tendency of everything going to hell.

In reply to Re: Logic for sorting of this given array by CombatSquirrel
in thread Logic for sorting of this given array by ravish

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