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What’s it: A flat organizational structure is an organizational structure without involving many managerial layers. In other words, these organizations involve little or no managerial layer between top executives and lowest-level management. The company gives more authority to employees to achieve the goals set in their own way. They are independent and trained to do the job and achieve targets.
This structure allows employees to be more productive, working individually or in groups. In addition, they can manage their work-life independently without being bothered by strict supervision by managers.
Small businesses usually adopt a flat structure. They have a relatively small and simple organization with few employees. In addition, employees usually work and hold several jobs, which require different specializations.
And, as businesses start to get bigger, tall structures are usually an option. Organizations and jobs are becoming more complex. Thus, it requires a more structured arrangement.
What are the consequences of a flat organizational structure?
As defined above, a flat structure aims to have as little hierarchy. As a result, top-level management is closer to lowest-level management without going through middle management as an intermediary. Thus, the communication and decision-making flow can be faster because it goes through fewer managerial layers.
In addition, senior management will place more authority and autonomy on subordinates. Thus, they have more opportunities to actively participate in making decisions.
What are the characteristics of a flat organizational structure?
Fewer middle managers characterize flat organizational structures. The company has a short chain of command. Each manager will have a wide span of control. Thus, they have more subordinates than in tall structures. Other characteristics of a flat organizational structure are:
- Communication and orders flow through a short chain because it involves a few layers.
- Management describes jobs broadly where employees can have several different roles and tasks.
- Units and jobs are flexible in that they don’t just focus on a specific area but can concurrently in other areas as needed by the business.
- Jobs and tasks usually place more emphasis on teams and teamwork.
- Management emphasizes a decentralized approach by giving more autonomy and delegation to subordinates.
- The career path is horizontal, which crosses functions.
Organization size
A flat structure is a rational approach for small businesses. This is because their operations and organization are relatively small. In addition, they have few employees. Thus, they do not need many middle managers to supervise, which is costly. In contrast, staff-level employees will usually report directly to the business owner.
If middle managers exist, they may head up business functions, such as finance, operations, marketing, and human resources. That’s usually for medium-sized businesses, where the owner is overwhelmed if he has to manage all the operations alone. And each manager has a wide span of control over their functional area.
Finally, a flat structure is not suitable for large companies. They have many employees, maybe hundreds or thousands of employees. As a result, organizations become more complex and difficult to manage if they rely on a flat structure. Long story short, when the scale of operations becomes larger, companies usually adopt a tall structure involving several managerial layers.
Flattening the organization
Making the organization flatter means removing some intermediate layers. We call this delayering. It involves removing one or more hierarchical levels from the organizational structure.
Delayering aims to make the organization more flexible. Companies can make and implement decisions faster because they go through fewer managerial layers. Apart from that, it also allows for more communication and collaboration between upper management and lower management. And finally, they become closer and support each other.
Post delayering, more senior managers will have more subordinates. Their span of control becomes wider. Their duties and roles become more numerous. Finally, it encourages them to give more authority and delegation to subordinates to reduce the workload.
Delayering is an effective strategy to improve operational efficiency. Eliminating the middle layer means reducing bureaucracy. It also encourages employees to be more involved in their work as they have more autonomy.
Self-managing team
Self-managing teams are common in flat organizations. Employees organize their own work. And, companies don’t need middle managers to supervise them. Instead, they appointed a manager on the team. Managers define goals or objectives for their teams and have the freedom to develop methods and organize the work used to achieve those goals.
Some examples of companies with self-managing teams:
- The Morning Star Company
- Marc Rich + Co
- GitHub Inc
- Reaktor
- 37Signals
What is the difference between flat and tall organizational structures?
Flat structures involve few managerial layers. Thus, the layer between top management and bottom management is shorter. This implies a shorter chain of command and a wider span of control, where each manager will have many subordinates.
In contrast, tall structures have many managerial layers. Many middle managers are the link between the top and bottom managers. Each has a narrow span of control with few subordinates. And communication and decisions flow through a long chain.
The flat structure is useful for removing excess management layers. Thus, it improves coordination and decision-making processes.
However, as organizations become larger, complex operations with many employees are difficult to handle by relying on few managers. Thus, the tall structure is usually the choice. It makes organizational arrangements more structured and workloads more distributed among managers. Further, it makes their roles and responsibilities more organized.
What are the advantages of a flat organizational structure?
The flat structure eliminates excess managerial layers and, therefore, is cost-efficient. Companies don’t have to hire expensive middle managers.
In addition, this structure also allows flexibility, improves coordination, and speeds up communication within the organization. Communication and decisions flow through a short-chain. Thus, messages can reach their intended manager without being distorted as they go through layers. Likewise, upper management decisions can reach lower management quickly for implementation.
Other advantages of a flat organizational structure are:
Delegation. Managers are more likely to delegate less essential authority and decision-making by having many subordinates. It reduces their workload.
Empowerment. Managers are more likely to trust and empower their subordinates in handling work and making decisions. They give more autonomy expect subordinates to be more independent in work and able to take on more responsibilities.
Job satisfaction. Employees have more flexibility in organizing their work as they get more autonomy and delegation. As a result, it can lead to better job satisfaction as they have more control over their work life.
Creativity. Greater control over work encourages employees to be more creative. Thus, they are motivated to exert their best ability to carry out their roles and responsibilities.
Innovation. More creativity can lead to more innovation within the company.
Collaboration. Companies typically rely on collaborative work to keep tabs on employees.
Personal closeness. Upper and lower managers are closer and interact more, enabling them to build constructive relationships. So, they can collaborate more effectively and support each other.
What are the disadvantages of a flat organizational structure?
Flat structures are often inefficient and effective for large organizations. The company has many employees and jobs. So, managing all of them under a few managers can create problems. The workload becomes extremely heavy.
In addition, responsibilities and roles usually become unclear. That’s because flat structures don’t usually divide them into more specifics. So, employees can lose direction, and on the other hand, managers lose control over them.
Other disadvantages of a flat organizational structure are:
Double role. The flat structure allows employees to take on multiple roles. The company does not divide and define employee work functions specifically.
Confusion. Without a clear division of roles, it is difficult to determine who is the right contact for any communication, especially by outsiders such as customers and suppliers. They don’t know who to contact.
Obscurity. Authority is not distributed in a structured and clear manner. Thus, who has the final decision-making authority is unclear. Finally, it creates confusion about who to report to.
Conflict. Without clearly defined authority, managers can come into conflict with certain decisions. Some may seek to dominate others. And they are likely to be fighting over each other for power.
Not growing. Without a clear division of roles and authority, it can limit the company’s long-term growth. When they get big, their organization has to be structured. Otherwise, operations and work become disorganized. Finally, there is no priority in managing and allocating resources.
Stressed. Delegation does motivate some employees. But, others may see it as a burden. Eventually, they get stressed and feel overwhelmed with their work.
Fewer promotions. Fewer managerial layers mean fewer opportunities for promotion. As a result, career-motivated people may be reluctant to stay with the company longer. Eventually, they moved to another company with more promotion opportunities.
