Definition of flat organizational structure
Flat organizational structure is defined as an entity where the top management is in direct contact with the front-line salespeople, employees at the floor levels as well as the customers. In such an organization leadership is decentralized, and there is no role and responsibility of the mid-management levels. The purpose of a flat organizational structure is to have very little hierarchy so that everyone becomes adept at handling whatever work comes their way.
Meaning of flat organizational structure
In a flat organizational structure, the manager has more responsibility as the number of people directly supervised by him is significant and these people at lower levels rely on him for support, guidance, help, and direction. This type of structure is created to empower employees so that they can take independent decisions. This structure is best for small and start-up organizations as it is designed to minimize bureaucracy.
Characteristics of flat organizational structure
The features of a flat organizational structure are
- Focus on the customers
- Strong emphasis on teams and teamwork
- Flexibility between units and jobs
- Broadly defined jobs
- Few levels of management
- A decentralized management approach
Advantages of flat organization structure
The benefits of a flat organizational structure are
- Cost-efficient – There are very few managerial layers in a flat organizational structure. It means that the company has to shed out less amount of money in terms of salaries, benefits etc. for the management level. As the salary-related expenses become minimum, the organization can save money and use it for other purposes
- Improved employee retention – The creativity of a highly-skilled workforce is limited in the vertical hierarchy, whereas, in a flat organizational structure, it is encouraged. When the employees get a chance to show their creative skills, it brings forth a sense of accomplishment. This improves employee retention because the workforce will not want to leave the firm in such circumstances.
- Improves employee morale – As there is no mid-level management, the sense of responsibility in the front-line staff is automatically high. The top levels expect them to be experts in their fields, and the focus is always on hiring the best available option for every position. This helps in less employee turnover and gradually improved employee morale.
- Encourages faster decisions – The best thing about a flat organizational structure is that there is a fewer number of people with whom you have to consult before coming to important decisions. A flat structure often gives the manager the authority to make independent decisions and this results in a faster decision-making process.
- Less dominance and supervision – In a flat organizational structure, the employees are empowered to make decisions. This requires less dominance and supervision because there is no need for micromanagement.
- High productivity – The sense of ownership and responsibility is high in a flat organizational structure, and this encourages higher efficiency and productivity in a company
- Clear and direct communication – There is no mid-level management, and this ensures direct contact between the top and lower levels. This is a bonus for the company because when information has to pass through several layers, the chances of misuse or distorted information is high. In a flat organizational structure, this is not the case, and hence the flow of information is clear and precise with little chance of miscommunication.
- Encourages collaboration – Collaboration is encouraged in flat organizational structure as the employees belong to the same playing field
- The direct route to customer – The front-line staff deals directly with the customers, and this leads to productive interactions. Moreover, the services and products also reach them at a faster pace
Disadvantages of flat organizational structure
The problems of a flat organizational structure are
- The chance of losing control is high – Flat organizational structure is not suited for large corporations where it is impossible to remove mid-level management employees. This type of model is problematic where the number of employees is vast as it is easy to lose control of the situation
- Work-relationship is a struggle – A manager has the responsibility of too many people working under him. This becomes problematic as it is not easy to supervise them daily. Maintaining connections also becomes a bit difficult as the work responsibility does not give the manager enough time. This harms the work-relationship which starts to struggle within some days
- Hinders growth – Change is somewhat tricky in a flat organizational structure as new opportunities may not be suited to this type of organizational structure. This may hinder the growth and cause upheaval in an organization
- Creates power struggle – In a flat organizational structure, the employees are empowered to make independent decisions. As they do not have a direct boss to report to, then there is confusion and struggle for power due to proper clarifications
- Motivation level is less – As there is very little room at the top, the climb becomes difficult. This is the reason why employees are less motivated
- Employee retention is severe – Every employee wants to climb the ladder of success. In a flat organizational structure, there are not enough steps to conquer, and employees who are looking for promotions in terms of improvement in rank do not have a place to climb. The job satisfaction, for this reason, tends to be low in this type of set up. Employees prefer companies that will reward them with promotion, and this is why the retention rate is lower
- Role confusion – In a flat organizational structure, employees have to undertake several responsibilities at a single time, and this creates difficulty in their minds about their actual role and accountability in the company.
- The chance of errors is high – There is a significant dependency on the first-line workforce in a flat organizational structure. If they do not have the necessary expertise, then it can lead to errors and issues that can result in a loss for the company
- Wasted time – A lot of time is wasted in flat organizational structure in ensuring that others are not duplicating the ideas of someone
- Limits productivity – In a flat organizational structure, there is an assumption that every worker is going to give his best. There are very little supervision and no micromanagement. This often results in complacency and tends to limit productivity
How to ensure your flat organizational structure stays healthy
Take the following steps to ensure your organizational structure stays healthy
- Emphasize transparency – It is a fact that lack of clarity will generally lead to abuse of power, and it is essential to ensure transparency in a flat organization structure so that it stays healthy. Transparency makes all available information accessible as people know where to go and whom to approach for the necessary information. Rules and regulations have a deeper meaning in a set-up where everyone is aware of everything.
- Set the tone at the onset – It is the management level or the leader at the top who should set the tone at the beginning because people will generally follow the directives that are told to them from that point. Actions speak louder than words, and the leader must set an example through his behavior, attitude and work ethics. This will ensure that the flat organization stays healthy
- Prioritize professionalism – Make sure to hire people who are professional and treat others properly. Soft skills come in handy during interactions with customers hence choose people who have a perfect balance of both if you want to ensure your flat organization stays healthy
- Do not skimp on people’s operations – Make human resources your priority and ensure people can ask for help and get outstanding support. Provide people with skills training if necessary, to make a positive impact. Do not skimp on people’s operations if you are looking for ways to ensure that the flat organizational structure remains healthy.