The Numbered List command will work with the Increase and Decrease Indent buttons to make a hierarchically structured list, but you have to type carefully (watch the tabs; no extra returns). Word calls this an Outline Numbered list. You can either type everything up against the left margin and format when you are done, or set the numbered list style first, then type. To create an Outline Numbered list:

1. Choose Bullets and Numbering from the Format menu.

2. Click on the Outline Numbered tab.

To format the list.

1. Click on the line or paragraph you want to move to the next level.

2. Click on the Increase Indent button to move an item to the next level.

3. Clicking on the Decrease Indent button to move an item to the previous level.