I had this same request float across my desk awhile ago (but it got tabled
for non-sharepoint reasons).
I'm not sure if it is standard AD schema, but where I work we have a AD
property called "Manager" for each user which is set to the actual AD user
object of that user's manager. I looked into querying that manager property
using the "Useful sharepoint Designer Custom Workflow Activities" project
from codeplex [1]. That project adds a "Lookup User Info" action to your
workflows that allows you to query properties like "Manager"; however,
querying the Manager property does not seem to work. I was expecting it
would return A SharePoint Person object, but that doesn't happen. If you
read the discussions on the codeplex site you'll see that others have tried
querying the Manager property and I don't think anyone has been able to get
it to work. You might want to look at this [2] discussion where a user is
attempting to do exactly what you're talking about here.
Instead of going that route, I created a "Management Hierarchy" list in
SharePoint which had two columns, "Employee" and "Reports To", both of those
columns were People objects. I had to fill that whole list in with all the
management relationships and then I was able to query that list and
determine who reports to who. You should be able to do that recursively and
build a whole chain of managers and do whatever you need to do with those
users.
Not sure if that helps, but if you come up with some good way to get this
working.