The physical appearance of an organizational structure or organogram can reveal the leadership style used in a Company. Reporting lines on some organograms are mostly vertical, while in others, they are mostly horizontal. In most scenarios, vertical structures imply a non-participatory corporate culture, while horizontal structures imply a participatory corporate culture. What is Flat Organizational Structure?
A flat organizational structure has direct reporting lines between senior management and employees. The middle line managerial positions do not exist in Companies that have this structure. The distribution of power and authority flows horizontally on this structure. Let us look at the advantages and disadvantages of this structure.
Advantages of a Flat Organizational Structure
Reduced “Red-tape”
This structure has an extremely horizontal flow of power and authority. As a result, respective officeholders make decisions and actions. Approval levels are few and even non-existent except for very critical issues that need the intervention of the senior management. Almost all employees are autonomous and leaders in their own right. The bureaucratic system applies to a lesser extent in this structure.
Reduced Supervision
There are no line managers and bureaucratic red tape is limited. This increases employee morale and boosts their performance because they do not receive unnecessary pressure. Most employees dislike being micromanaged by line managers and supervisors. Employees and supervisors are constantly in antagonism with each other in hierarchical organizations. The flat structure has eliminated the line manager position and supervisor. This implies that employees manage themselves and perform work independently. This helps them develop their professional and leadership skills.
Innovation
The removal of line managerial positions forces employees to operate by themselves. The employees also have to adopt the generalist approach to work. This means that they perform almost all the tasks at the workplace. This is a learning opportunity and it natures creativity among them. When they experience challenges in areas they are not competent in, it forces them to research or develop a new way of tackling the issue. This makes them improvise or invent new methods and techniques of working.
Quick Decision Making
There is the removal of line managerial positions and the reduction of bureaucratic red tape. This creates more flexibility in processes and activities. It also assigns power and authority to the employees, who are now free to make independent decisions as they perform their duties. Consultations with senior management are frequent since they have direct access to them. If decisions are complex or critical, they can easily get assistance. Each employee has assigned duties to perform and the employee deals with the challenges or inquiries without referring to too many officers.
Enhanced Consultations
The structure creates a participatory environment at the workplace. The officeholders consult each other as colleagues and counterparts. This removes the element of fear; genuine learning and consultations take place. Since the employees also have direct access to senior management, they can easily get assistance or guidance when the need arises without having to go through several approval channels.
Communication
The employees are more or less on the same rank or level of seniority. This creates an atmosphere that is conducive to genuine interaction and sharing of information. The business operates in an atmosphere that is non-threatening since there is limited red tape and supervision. Conducting discussions and debates related to Company operations is easier because approval levels are few. The employees have direct and easy access to senior management making communication frequent and real-time.
Transparency
The employees are free and open with each other because there is limited red tape. The structure gives each of them equal power and authority. There is a lot of sharing of resources and information as the structure emphasizes participation and collaboration. The employees are dependent on each other and interact frequently to meet Company goals and objectives. Frequent contact and communication ensure that there is no secrecy or withholding information.
Employee Engagement
This structure emphasizes participation and sharing. As a result, employees are included in the decision-making process. They take ownership of decisions and actions because they are involved in planning. This improves performance and loyalty among teams. Employees also tend to trust the senior management as communication is open and prompt.
Improves Performance
The line managerial positions do not exist in this organization and bureaucratic red tape is limited. There is direct access to senior management and communication is open. Employees participate in planning and decision-making. There is collaborative effort while performing duties. All this creates an environment that is conducive for learning and working. Employees adopt a generalist approach to work; as a result, they acquire a lot of knowledge and skills. They are creative, innovative, and inventive as they tackle challenges in unknown territory. All this boosts their performance and productivity at work. This in turn increases the profitability of the organization.
Cost-Effective
The structure is easy to develop and implement because there is sharing of resources and information. There is no duplication of roles and there is the removal of some operational levels. This reduces the number of personnel required to facilitate operations in such an organization. This implies making savings on payroll, procurement, and maintenance expenses.
Disadvantages of a Flat Organizational Structure
Few Promotions
This structure does not have opportunities for professional and personal development. There is no opportunity for growth or promotion. There is no hierarchy to move up to attain a senior position. Employees tend to stay in a specific position for years without personal or professional advancements. This creates monotony and apathy.
Insubordination
The employees are on the same rank or level on this structure. They have direct access to senior management and bureaucratic red tape is minimal. There is the removal of line managerial positions and supervision. Employees are all leaders and they enjoy equal rights. As a result, it becomes difficult for such an employee to acknowledge and implement instructions from a colleague. The employee will only yield to these instructions if they emanate from senior management, which may take some persuasion and time. Senior management can also fall victim to this practice since they become “one” with the team due to the structure’s collaborative element. Direct and frequent access by the employees can yield complacency.
Minimal Delegation
The line managerial positions do not exist and bureaucratic restrictions are minimal with this structure. The reporting lines and flow of power are horizontal. Employees are on the same rank or level on this structure. All this implies that there is little or no room for delegation of duties as it is only applicable with junior personnel. Except for senior managers who have this privilege, the other employees experience challenges in the delegation. They all perceive themselves as leaders in their own right. This superiority complex is a hindrance to the delegation practice. Except for favors, employees are not obligated to receive instructions from their colleagues within this structure.
High Workload
The structure omits the middle-line managerial positions. This does not mean overlooking the work meant for this level; rather, someone else is bearing that burden. The senior management will take on this additional responsibility or redistribute it to the other employees. There is the adoption of a generalist approach to work with this structure; this means assigning employees diverse tasks, even those that are not in their field of expertise. The workload increases, whichever way you look at it.
Overlapping Roles
The structure has few ranks or levels, which imply activities, are concentrated at one level. Employees can easily find that they are performing all duties with no regard for specialization due to a high workload and generalist approach. With such a structure, employees and management work in a collaborative manner to meet goals and objectives. In the absence of specialization, any available employee performs duties. This can create future risks and litigation due to non-compliance with industry and professional standards.
Competition
There are power struggles because employees are on the same rank. Human nature will make some employees want to dominate in the office environment. This creates fierce competition and unrelenting conflict between employees. Overlapping roles and insubordination also contribute to this state of affairs.
High Turnover
The structure does not encourage job specialization and it gives little or no room for promotions. It also does not have room for professional and personal development. Employees who desire to be experts in their field by specializing in a specific role cannot achieve this easily due to the generalist approach to work. This creates apathy among employees. They will eventually seek alternative employment for career progression and job specialization.
Rigidity
This structure is suitable for small businesses or companies. Large corporations cannot implement this structure due to the high number of employees and complexity of their operations. Therefore, when the small business or company grows, it forces them to have a total overhaul of the structure and implement a new one. This is costly and time-consuming.
Accountability
This structure leads to a laissez-faire attitude towards work and leadership. There are no clear reporting lines and roles overlap many times. As a result, supervision and monitoring are ineffective and employees can easily take advantage of this. There is sharing of tasks, in case of challenges or problems, no one is accountable. There is no sense of obligation or responsibility among employees when problems arise.
Errors
There is the removal of line managerial positions. This implies that there is less supervision and specialization. The employees are generalists and may not understand the requirements and standards required for specific tasks. This leads to non-compliance with approved industry and professional standards. It increases risk opportunities in the business environment.
Conclusion
The flat organizational structure has omitted several levels of management. It creates a direct reporting line between employees and senior management. The line managerial positions do not exist in this structure. This reduces employee ranks and encourages a generalist approach to work. Most small businesses adopt this structure because their operations are not complex and they have few personnel. This structure emphasizes collaboration and consultations in internal business operations.
Frequently Asked Questions
- What is a flat organizational structure?
It is a governance framework in a Company with few management hierarchies and it gives employees direct access to senior management.
- Which companies can use a flat organizational structure?
This structure is suitable for small businesses and organizations with few numbers personnel and operations.
