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What does it mean?
What are the benefits of a flat organizational structure?
In this article, I will break down the notion of a Flat Organizational Structure so you know all there is to know about it!
Keep reading as I have gathered exactly the information that you need!
Let’s look at what flat organizational structure means and how it works!
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What Is A Flat Organizational Structure
A flat organizational structure is a type of organization where the highest management level is hierarchically very close to the workforce at the bottom of the organization.
In essence, in a flat organization structure, you will not find many levels of middle managers separating the workforce from the high-level managers or executives.
As a result, the direct benefit of a flat organizational structure is that the company employees have more decision-making authority and have a much closer connection (or contact) with the high-level management team.
A company’s structure has an important impact on the entire organization from how it operates its business, employee communication, accountability, and teamwork.
Companies will generally choose between two types of structures:
- Hierarchical structure
- Flat structure
Depending on the company, its size, overall goals and objectives, it may choose one type of organization structure over another.
Flat organizations are those that have a reporting structure where there are no or few middle management levels separating the company leaders and the employees in general.
Flat Organizational Structure Advantages
What are the advantages of flat organizational structure?
In recent times, there’s been an increase in the number of organizations claiming to be flat or have few management levels allowing them to offer a more collaborative and interconnected environment where the employees are empowered to do their jobs.
The advantages of flat organizational structures are that:
- The employees are given more responsibility
- The employees are involved in important company decisions
- The company leaders offer a more transparent work environment
- The communication between top managers and employees is easier
- The power within the company is spread over various teams
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A great book you can get to see how you can build a flat organizational structure is Flat Army: Creating a Connected and Engaged Organization (Amazon Link)
Flat Organizational Structure Disadvantages
What are the disadvantages of a flat organization structure?
Although having a flat company structure may be beneficial to creating collaborative work teams, greater employee autonomy, and more delegation of power from higher-level managers to the employees, there are certain drawbacks that should also be considered.
One of the most important drawbacks in working in a “flat” company reporting structure is that there is a lack of clarity and accountability within the organization.
In other words, since a “team” may be responsible for certain projects or activities as opposed to a single “manager”, others within the company (and even members of the same team) may not have a clear idea as to who is responsible for what.
You are likely to see a flat reporting structure in new companies with few employees, startups, and rapidly growing companies.
Since it’s not clear who may be responsible for a particular task, project, or activity, it will also be difficult to find the right person to communicate with when you need to address certain issues or make certain decisions.
Larger and more mature companies tend to be more “hierarchical” in nature than flat as they have a need to have specific people responsible for specific tasks or projects.
A large company with many employees may not be the proper structure to implement a flat reporting structure as it may lead to inner-fighting, political decisions, and lack of proper accountability.
Flat Organizational Structure vs Hierarchical Organizational Structure
What is the difference between a flat organizational structure and a hierarchical organizational structure?
In a flat organizational structure, the company does not have too many management levels and the decision-making is decentralized.
Instead, many company employees report to a manager and their managers report directly to the company executives or leaders.
In flat organizations, the employees are given more authority to make decisions and can even access the highest-level executives of the company quite easily.
In essence, you can consider that since the company does not have middle managers (or few of them), the middle management authority is passed down to the employees.
In a hierarchical organizational structure, there are many management “layers” and decision-making is more centralized.
Since there are many management layers, the company forms a reporting structure that looks like a pyramid where the top of the pyramid is where the company authority resides and trickles down.
For example, in a hierarchical company, the lowest level employees tend to report to their supervisors, the supervisors into their managers, their managers into general managers, general managers into vice presents, vice presidents to presidents, and presidents to executive members.
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Flat Organizational Structure Example
What is an example flat organizational structure?
Let’s look at an example to see how a flat company operates.
Imagine a software startup that is founded by three co-founders and employs fifty employees.
The company founders have decided to adopt a flat company structure where there are no middle managers.
The three company founders are part of the company executive team where one is the CEO, one the COO, and the other the CTO.
Within this company, all the employees report directly to the executive leaders.
The company has delegated power to the employees who are responsible to make the best decisions for the company.
Here are some known companies that have adopted a flat structure with self-managing teams:
- Qamcom Research and Technology
- GitHub Inc
- The Morning Star Company
- Valve Corp
The fact is that not all large companies can effectively implement a flat reporting hierarchy as it may lead to other unwanted consequences such as lack of proper handling of employee grievances, creation of a politicized work environment, lack of accountability, and other adverse consequences.
Flat Organizational Structures Takeaways
So there you have it folks!
What is flat organizational structure?
What are the flat organization structure advantages and disadvantages?
In a nutshell, a company’s organizational structure has a direct impact on the level of authority delegated downwards from top-level managers and the overall reporting structure of the organization.
A company’s organizational structure allows the business to establish the lines of communication between company managers and employees, the level of authority given to the employees, and the nature of responsibilities at different company levels.
When the structure is considered to be flat, it means that the company has a structure where there are few or no levels of management between the managers and the staff.
Companies with flat organizational structure are proud of the fact that they are able to empower their employees, give them more responsibilities, and where the acting managers have a closer relationship with their staff.
In a flat company, everyone is sort of “hands-on”.
Other benefits of flat organizational structure are that without a middle management level (or a thin one), the company can save money by paying less management salaries and thus paying their employees higher wages or having the ability to speed up internal communications.
Although a flat organizational structure benefits small companies, startups, and certain types of companies where culturally it’s important for its managers to be close to all their employees, it may not be the most suitable structure for all companies.
I hope I was able to help clarify the notion of a flat organization structure, what it means, how it works, and why some companies adopt it.
Looking for Leadership Lessons?
A great book on how leadership lessons to read is How Toyota Became #1: Leadership Lessons from the World’s Greatest Car Company (Amazon Link)
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Flat Organizational Structure Definition
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