That's how I picture it. It's like the Roman Empire. Vito was the Emperor, with two regional Governors basically under him who had their own governors (who in turn commanded small armies of made guys and associates) all reporting back to Vito. Notice that in GF 1, only Clemenza and Tessio are around Vito in a business capacity. He used them as insulation from the Feds effectively. And then Michael used Tom in a similar way in II.