Although hierarchical organizational structures have been the go-to option for a long time, many modern companies are opting for flat structures that allow for a collaborative, interconnected team where every… If everyone enjoys the freedom of having no bureaucracy and the ability to take things to the boss, then switching to a more formal, less-flat structure won't make anyone happy. Opening up lines of communication rather than having employees report only to the person above them improves the employee experience and makes it easier to collaborate. Look for opportunities. A flat organization (also known as horizontal organization) has an organizational structure with few or no levels of middle management between staff and executives. Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. There is not a significant amount of middle management in a flat organizational structure. The purpose of a flat organizational structure is to have very little hierarchy so that everyone becomes adept at handling whatever work comes their way. Maintaining connections also becomes a bit difficult as the work responsibility does not give the manager enough time. In theory, a flat organizational structure is great; the best person for a given problem steps up and addresses it and everyone supports them. Flat structure is also known as horizontal structure. A formal hierarchy, run properly, has discipline and penalties for managers who abuse their authority. Meaning there are usually no job titles, seniority, managers, or executives. Copyright 2021 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Converting an established company with a conventional hierarchy to a flat hierarchy is a massive undertaking. Startup staff members who have come from larger corporations may relish going flat as an alternative to bureaucracy. Executives may rely on the same informal structure to get things done. Career advancement is often associated with climbing up the corporate hierarchy until – if you're both good and lucky – you crack the C suite. The appeal of the flat organizational structure is that it avoids some of the problems that bog conventional management hierarchies. This presents the organizational structure in graph form. If a hierarchal organization could be represented as a mountain, a flat organizational structure is a flat plateau. The executives the company does employ may feel overwhelmed. This structure is best for small and start-up organizations as it is designed to minimize bureaucracy. It's harder to hold unofficial leaders accountable. In a flat organizational structure, there is no middle management, just the boss and the employees. Employees who like working with each other may eventually turn cliquish, offering no support to other employees and their projects. 1. Employees enjoy the freedom that comes with choosing their own projects and managing their own work. Consider what skills you need and where you can learn them. At the game-design company Valve, for instance, employees choose the projects on which they want to work or seek out funding for their own goals. That's liberating, but it may not take you any further than you are now. This becomes problematic as it is not easy to supervise them daily. Decision making has to be transparent. A flat organizational structure is precisely what its name suggests. As they don't have pressure from a superior and also as they don't have a deadline, it will help them to work freely on their projects. Leaders have to be able to take it when employees challenge their ideas. How do you climb when there's no hierarchy to ascend? Flat organizational structure is defined as an entity where the top management is in direct contact with the front-line salespeople, employees at the floor levels as well as the customers. Forbes: The 5 Types Of Organizational Structures: Part 3, Flat Organizations, Forbes: The 5 Types Of Organizational Structures: Part 2, 'Flatter' Organizations, Lighthouse: Nails in the Coffin: Why a Flat Organizational Structure Fails, The Conversation: The Appeal of the 'Flat' Organization – Why Some Firms are Getting Rid of Middle Managers, The Guardian: No Bosses, No Managers: The Truth Behind the Flat Hierarchy Facade. "Because your supervisor says so" doesn't provide the motivation employees need in a flat system. This type of structure is created to empower employees so that they can take independent decisions. The growth can be in the for… The flat hierarchy reduces or removes middle management so there are as few bureaucratic layers between the boss and the frontline employees as possible. March 6, 2020 By Hitesh Bhasin Tagged With: Management articles. It Promotes Faster Decision Making Another advantage about a flat organiza… A flat organizational structure is a type of business structure that does not have multiple layers between the company's day-to-day staff members and high-level executives. Employees who want to advance may find a flat management structure baffling. Leadership is decentralized, and there is no one person (or group of people) at the top. An organization's structure refers to the nature of the distribution of the units and positions within it, also to the nature of the relationships among those units and positions. Beneath each management box, lines connect the … The business world has many rules of thumb for figuring out when to scale up. Some employees are more comfortable with supervisors giving their job structure and direction. Employees on the sales floor or the factory floor report directly to the top boss. Middle managers perform valuable services, such as communicating strategy, helping employees prioritize and developing employees' careers. Flat organization structure is defined by lack of hands-on management, a high degree of autonomy, and everyone being empowered to make important decisions for the company. Other companies may not go that far. Salary-related expenses are reduced, enabling the company to save money as well as provide better pay for its workers.2. New products and services reach customers faster. Executive management is in the top level, with each manager separated by boxes. Let's stay in touch :), Your email address will not be published. This type of organizational structure is used more by smaller companies since they have fewer employees, though it can be used in companies of all sizes. When a startup begins, running flat is often the logical approach. It allows employees to question hierarchical practices, such as annual employee reviews and rigid schedules. Flat organizational structure is defined as an entity where the top management is in direct contact with the front-line salespeople, employees at the floor levels as well as the customers. In a completely flat company, employees make their own decisions. Build networks of supporters and allies who can help you get where you want to be. What's that all mean? Another argument against the flat management structure is that organizations can't function without a hierarchy. Small organizations and startups often have flat structures because they have fewer employees and less of a need for hierarchical management. [1] Organic structures (also known as \"flat\" structures) are known for their wide spans of control, decentralization, low specialization, and loose departmentalization. Many companies draw their organizational structures on charts. Flat teams can't scale. The lower number of employees who are focused helps in ensuring that the business is able to manage without complicating things for the organization. It has to be willing to let go of the classic big-business hierarchy. Realize you can develop and grow at the company without ascending to a new job title. Proposals and ideas that middle management might shoot down go straight to the boss. Unofficial leaders develop, and other employees turn to them as if they were managers. In such an organization leadership is decentralized, and there is no role and responsibility of the mid-management levels. However, the structure of a business is important in accomplishing corporate goals and objectives, achieving greater productivity … When there's a problem, the most qualified person can step up and tackle it without worrying about formal authority. The specific number will vary with the complexity of the business. His website is frasersherman.com, Reviewed by: Michelle Seidel, B.Sc., LL.B., MBA. Employing 15 staffers without supervisors is more practical than 1,500. Reducing the layers of management peels away bureaucratic sludge. It allows more people to take on leadership roles, and always ensures you have the best person for a given problem. Flat organizations have little-to-no management levels. Definition of flat organizational structure, Characteristics of flat organizational structure, Advantages of flat organization structure, Disadvantages of flat organizational structure, How to ensure your flat organizational structure stays healthy, Employee Relationship Management – Definition, Meaning, Functions, An Overview of Hospitality Industry – Services and Challenges, Laissez-Faire Leadership – Characteristics, Advantages & Example, Work-relationship is a struggle – A manager has the responsibility of too many people working under him. Unless otherwise stated, they could also refer to any … If a company doesn't have a formal hierarchy, it will develop an informal power structure instead. Employees down in the trenches need to think like entrepreneurs. Flat and Hierarchical Organizational Structures refer to the typeof order a business or corporate’s managers, subordinates and staff are positioned for reporting, supervision and communication purpose. Small organizations, naturally adopt this structure because of limited employees. A flat organizational structure removes levels of management, has relatively few reporting levels, and has decentralized control, giving individual employees more involvement in the organization. If it doesn't want employees exercising more independence, then flat's not the way to go. This simplifies decision making and action, but at large companies, it's often impractical. If a company has only a dozen employees, the founder may be able to supervise them all personally. Flat organisational structure is a structure where there are no levels or very few levels between managers and staff. Unlike any other corporate structure that exists, flat companies are exactly that...flat. Put simply, it refers to how an organization arranges its staff and jobs so that its work can be performed and its objectives and goals met.There are many different ways in which a company or organization may be structured, depending on why it exists and what its objectives are.For the rest of this article, I shall use the terms ‘company’, ‘business’ or ‘firm’ when referring to an organization. Organizational structure varies in each company. An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. And Why it is Important, What is Employee Engagement And 7 Ways to Improve it, Organizational Theory – Definition, Meaning, Types, Organisational Commitment – Definition, Meaning, Components, Organizational Behaviour – Definition, Meaning, Types, Objectives, Organisational Design – Definition, Meaning and Examples. The purpose of the flat management structure is to have as little hierarchy as possible. Employees said that barons who supported them could easily and arbitrarily withdraw support. In such an organization leadership is decentralized, and there is no role and responsibility of the mid-management levels. A flat organizational structure has few managers between the chief executive officer or president and the lowest-level employees. a distributed management system where no one is the boss and employees can make impactful decisions at all levels Even companies that can't erase middle management can trim it. When you don't have job titles or rank to impress anyone, it's even more important that your work speaks for you. It is designed to minimize bureaucracy. To make a flat or flatter organization successful, a business needs several things: A company that starts small and flat doesn't have to adopt a classic over-managed hierarchy as it grows. In a flat organization, you have the freedom to move from project to project. The flat organizational structure eliminates middle management and adopts a more casual, people-powered approach to running a business. If you work on them, that could put you on a winning team. With no hierarchy, there's no risk of working under a toxic, bullying boss. It takes a conscious effort to keep things as flat as possible, however. In a flat organizational structure, the manager has more responsibility as the number of people directly supervised by him is significant and these people at lower levels rely on him for support, guidance, help, and direction. A flat organization structure is designed to minimize bureaucracy and make employees more productive by empowering them to make decisions. A flat organization has a hierarchical structure with employees concentrated at the bottom layer with a relatively small management structure on top. Look Again. A flat organization refers to an organization structure with few or no levels of management between management and staff level employees. Figure out the growth areas in the company. It is most often used by small companies or firms that employ knowledge workers who don't require much management oversight. Association for Talent Development: No Way to Grow and Advance in a Flat Organization? Hiring enough managers to direct employees keeps things efficient. They're "flatter" companies rather than completely flat. You can follow me on Facebook. Your email address will not be published. In this structure the most trained employees get involved with decision making process. Reflection: Opening the Valve The valve is currently using a flat organizational structure. It can be much harder to hold employees accountable. It has an understanding that management is there to help employees rather than employees existing to help management. In a flat organization, there are little to no management levels between "superiors" and staff. The employees will get the freedom to work on their creative ideas. The more employees each individual executive oversees, the slower their responses become. With a few notable exceptions, the successful examples of flat teams are all … While some companies grow out of this organizational structure, others continue to use it. A flat structure is an organisational structure with only a few layers of management. The further over that limit things go, the harder it is for managers to manage effectively. Everyone is seen as equal. Knowing where you want to be can help you decide which projects will get you there. If employees don't like their colleagues, they can rearrange their work to deal with people they like better. Some companies find this liberating, but it leaves other organizations floundering. Ask yourself what skills you have that you're not using on the job yet. Employees are not supervised by many levels of management. One way to use the flat organizational structure effectively is to shoot for flatter rather than completely flat. When employees have problems, they have no idea to whom they should take them. What is Analytic Hierarchy Process (AHP) and its Benefits? This structure generally occurs in a small organization or in a smal… It Is Cost Efficient As mentioned, in this organizational structure, there are fewer (or no) manager layers between the executive and the staff. Having a formal management structure beyond "I'm in charge" seems unnecessary. Fast Company: What Kind of Leadership Is Needed In Flat Hierarchies? A flat organizational structure eliminates middle management. Employees must be able to access the resources they need. This harms the work-relationship which starts to struggle within some days. Because there is a focus on hiring the best people possible for each position, less turnover typically occurs. As the company grows, it becomes harder to stay flat. If the company is introducing a flatter hierarchy, managers may resist out of fear for their jobs and status. One best practice, for example, is to have no more than 10 people reporting directly to one individual. In other words, you would probably see a large number of employees or interns supervised by every single executive. There are no middle managers who report to senior leadership while overseeing junior employees. A horizontal or flat organizational structure fits companies with few … 2. 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