An organizational structure is a framework for how business activities are performed and identifies each role, function and person in the organization’s operation within a set hierarchy. Having the right kind of organizational structure in place is critical to achieving your company’s mission.
Organizational structures have been a popular topic in the past several years, partly because of the effect of the COVID-19 pandemic on businesses. Disruptions and backlogs posed challenges to organizations of all sizes. Then, a company’s success begins to depend mainly on its ability to respond quickly to these challenges.
Unfortunately, bureaucracy and red tape often hindered workers’ ability to respond to pandemic-related changes. The traditional “tall” organizational structure, a vertical system in which executives are at the top and rank-and-file employees at the bottom, showed itself as inadequate in business conditions that require fast decision-making and innovation.
Managing an organization is challenging as it is, and even more so when unexpected obstacles occur. Decisions and communications must flow faster from management to employees to ensure your business remains agile no matter the situation. This is where the flat organizational structure comes in.
A flat organizational structure has few levels of middle management between the top executives and rank and file workers, or none at all. It’s commonly used by startups keen on maintaining a spirit of innovation and collaboration without the red tape associated with stricter, vertical hierarchies.
The chain of command can be too long and complex in a conventional organizational structure. As a result, it can get impacted by issues such as:
On the other hand, a flat organizational structure offers the following benefits:
A flat organizational structure eliminates the need for several middle managers. This results in employees having greater responsibilities. As a result, employees may feel more motivated and invested in the organization. Greater job satisfaction leads to improved work quality and increased productivity.
In a flat organizational structure, the information goes through fewer channels. A straightforward process allows for faster implementation with fewer errors.
Unlike vertical organizations that operate in silos, team-based problem-solving is standard in flat organizations. Instead of relying on managers to provide solutions, employees work together to come up with new ways to fix problems. It’s worth noting that not all problems require extensive collaboration, but for those that do, it’s easier to get input from multiple sources in a flat organization.
Decisions in a flat structure are made at the staff level. Apart from fostering accountability and encouraging innovation, delegating decision-making to rank-and-file employees means you don’t need as many middle managers. In fact, you might not need one at all.
Employees in a flat organization are more likely to work better together and have positive relationships if they don’t have to go through several layers of management. Further, a flat organizational structure encourages accountability and transparency as well as makes it easy for executives to recognize and reward team members who excel.
All of these factors help create a positive workplace culture that promotes employee retention and attracts skilled and hardworking talent.
HPWP Group is dedicated to helping organizations with leadership and organizational development challenges. Our services include the High-Performance Leadership Workshop™, which teaches current and future leaders what they need to know to achieve excellence in their organizations. To learn more, contact HPWP Group today.