“Market leaders win by building an adaptive, innovation-friendly organization, establishing an inspiring culture and empowering employees,” according to Learn Management 2. Flat organizations meet many of those goals. Flat organization is something of a misnomer, since they are not really flat--just flatter than tall organizations. Instead of “shifting the responsibility” up the management ladder, flat structures empower employees to take charge, help make decisions and feel responsible for the company’s success.
Flat organizations have relatively few--sometimes just one--layers of management. Unlike the tall structures common to many businesses, flat structures have a short chain of command and a wide span of managerial control. Span of control, originally a military term, refers to the number of subordinates that directly report to that manager. In a flat structure, more subordinates report to a single manager. Due to the reduced number of management layers, small organizations get the most out of flat structures.
Flat structure facilitates a greater level of communication between employees and management. They tend to be more democratic and offer a greater level of innovation. Communication is usually faster, more reliable and more effective than in tall structures. Direct staff input leads to more support for decisions and fewer behind-the-scenes power struggles and disagreements.
Lean and fit, flatter structures are more flexible and adaptable than taller structures. That level of flexibility means decisions are made on an “as needed” basis, which makes it easier to serve your clients. In a tall organization, a staff member needs approval from a supervisor who needs approval from a manager, and so on, before a decision is made In a flat organization, staff members have more power and can make some decisions immediately. Organizational structures with fewer layers of reporting often contain less bureaucracy. Decisions are therefore quicker, giving the company greater agility and mobility.
Performance, Production and Profitability
The flat structure revolves around qualified and competent staff. Fully engaged, skilled work groups leads to happier workers and lower turnover. When employees are more responsible for operations, they take more pride in the company's success. Fewer upper management employees means fewer managerial salaries, too. This can lead to a decrease in employee expense and an increase in profits.
One problem with the flat structure is that workers could have more than one boss. Limiting the height of a structure can also hinder its growth. Successful flat structures are sometimes limited to smaller companies like partnerships and co-operatives. Because the structure is somewhat "groupthink" based, the function of each department may overlap and blur into the role of another, causing some confusion.
Small vs. Large Companies
Flat structure works best for small organizations or for small units inside a larger organization. Large structures lose flat structure benefits when there is too much variation between offices or locations. Of this, The Business Plan says, “There have been instances where customers were given a discount on an item in one store, but not the same store in a different location. This does not promote good customer relations.”
- flat men 6 image by chrisharvey from Fotolia.com