When the businesses start growing with a lot of additions however there is a need to adopt a for… The matrix organizational structure is a combination of two or more different kinds of organizational structures, such as project management or functional management. In other words, a flat structure helps employees become effective team players and independent thinkers. It means that the company has to shed out less amount of money in terms of salaries, benefits etc. In a flat organizational structure, there may be just one top manager who is an owner or CEO of the company, overseeing a handful of other employees, all with equal levels of authority. In particular, fewer levels means fewer employees. A flat organization – sometimes referred to as a horizontal organization – has few, if any, layers of supervision and management between staff and the company's top executives. By giving everyone in a company an equal voice in submitting new ideas and feedback on operational processes, products, services, business models and company policies, companies can discover new ideas that may lead to competitive success. 1. You may be familiar with tall organizational structures that feature numerous layers of management, cascading from the executive level all the way down to front-line management. It's like the game of "Pass the message" where a line of individuals pass a secret message to each other and the last one in line must accurately declare what the secret is. The following are the advantages of the Flat organization structure. The flat organization structure has less supervision of employees and promotes their increased involvement in the decision-making process. It Is Cost Efficient As mentioned, in this organizational structure, there are fewer (or no) manager layers between the executive and the staff. A flat organizational structure can yield several advantages, including costs savings, rapid adaptability, and an innovative workforce. A flat structure will also allow the organization to see which employees are contributing more and which ones are more passive. Since there are fewer departments, information is better relayed. Flat Org Framework Main Advantages. need to describe the advantages of a shallow or flat organizational structure. This structure generally occurs in a small organiza… Employees are also more willing to learn new skills from colleagues, helping them become more efficient workers. Decentralized Organizational Design. Benefits in a Flat Structure. Instead, organizations with a flat managerial structure tend to focus their career development efforts on top performers. Salary-related expenses are reduced, enabling the company to save money as well as provide better pay for its workers.2. Divisional structure offers many advantages over functioned structure especially in terms of autonomy for efficient management, management development, increasing organizational size up to any limit, and taking into account of specific problems related with each product or territory contributing to the overall objectives of the firm. As a small-business owner, Ingram regularly confronts modern issues in management, marketing, finance and business law. Companies with flat organizational structures can outsource non-vital business functions to further reduce expenses. However, the flat structure also makes it harder for ambitious employees to find satisfaction. With a flat structure, employees get to work closely with managers and executives and so learning and training will take place continuously. Plus, since when there are fewer people each person is more accountable, a flat structure can encourage better productivity, and more work gets accomplished. Reduce unnecessary layers of the managers in order to improve the coordination and productivity. Plus, because bureaucracy is reduced, there is more equality among the employees. Hierarchical structure of an organization usually has vertical levels leading up to the top head – the CEO or Managing director. It is called flat because the name points to the organization's feature of creating a smaller hierarchy for its staff. Since more employees are on a level playing field, more responsibility is placed upon each individual, creating a situation where innovative, collaborative self-starters excel and passive followers lag behind. If there are fewer participants in the game, the message will more efficiently be passed on and the information will generally be more accurate as well. Each employee will have a better sense of commitment and ownership when it comes to his or her job. This type of structure contributes greatly to reducing costs. This means that there are less wages, fringe benefits, and so on, to pay for management. Flat organizational structures feature fewer layers of management. Advantages of the hierarchical organizational structure are many, the most impelling of which is that your employees will have clearly defined roles and responsibilities, and a sense purpose in accomplishing those roles. Flat organisational structure is a structure where there are no levels or very few levels between managers and staff. List of Pros of Flat Organizational Structure 1. It requires fewer hoops. A flat organizational structure can yield several advantages, including costs savings, rapid adaptability, and an innovative workforce. “Market leaders win by building an adaptive, innovation-friendly organization, establishing an inspiring culture and … Tall and flat organisations The staff structures of a tall organisation and a flat organisation Tall organisations Advantages. Effective communication will eliminate any delays in decision making by managers and executives, thereby allowing work to go on smoothly. Some related articles on flat organisation structure: Tall organisation structure. Fewer employees means less expenses for payroll and office space. Horizontal or flat org structure. A flat organization aims to reduce bureaucracy and give employees more active roles by allowing them to become more involved in problem solving and decision making activities. There are advantages to this -- it lowers the problems caused by unhealthy competition. Please help us improve. Justin Pumfrey/Stone/Getty Images The primary advantages of a flat organizational structure in business include direct involvement of workers in the decision-making process, better communication flow, faster response times to business challenges, and an open, collaborative environment that promotes idea generation and innovation. One of the main advantages of a having a flat organizational structure is reducing the overall costs of operations. Much media attention has focused on holacracies, but actually holacracy is just one type of flat hierarchy that became popular due to its adoption by well-known companies operating in Silicon Valley and the wider technology sector.. What holacracies and other forms of flat hierarchies have in common is a smaller-than-normal layer … A flat organizational structure will also enable all employees to participate in all activities of the organization. A quicker decision-making process among team members than those companies who have overloaded management positions. One of the main advantages of a having a flat organizational structure is reducing the overall costs of operations. As an added bonus, organizations with a flat structure can attract the type of employees who are encouraged by a work structure that requires self-motivation and teamwork. Work groups assigned to unique projects, for example, can often craft their own unique operational processes in flat organizations, without seeking the approval of upper management. It Promotes Faster Decision Making Another advanta… 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. Cross-training is therefore inevitable. Flat structure is also known as horizontal structure. The main purpose of having a flat organizational structure is to encourage all employees to become more active and productive by giving them more roles in the decision-making process. It allows for a faster decision-making process. As opposed to other structures like huge pyramids with lots of layers, a flat organization is much smaller in scale. A horizontal or flat organizational structure fits companies … Savings can be substantial, since manager-level staff generally command high-end salaries as well as expensive benefits and job perks. Small organizations, naturally adopt this structure because of limited employees. Outsourcing tax preparation, recruiting activities and IT functions, for example, can allow companies to operate in a lean fashion by eliminating entire departments from their payrolls. Each employee will feel more empowered to impart his ideas and to execute them with more confidence. One big advantage of having a flat organization is that there will be less decision-making hoops. © 2006-2021 LoveToKnow, Corp., except where otherwise noted. Since flat organizational structures feature fewer layers of management, flat organizations can incur smaller expenses on salaries. Benefits or advantages of a flat organisation structure are as follows: Flat Organisation is less costly because it has only few managers. In comparison to a tall organizational structure, a flat organisation structure has fewer levels of management and therefore a short chain of command. In particular, fewer levels means fewer employees. In a flat structure, managers have a wide span of control with more subordinates, and there is usually a … It empowers the employees more and elevates their level of responsibility. When front-line employees are empowered to handle customer complaints without management approval, for example, complaint resolution can progress more efficiently, boosting customer satisfaction. Flat structures tend to empower the employees more and allow them a greater sense of responsibility and autonomy. Advantages of a Flat Organizational Structure, Business Operations, Corporate Management, Sample Request for a Letter of Recommendation, Business Accounting and Finance Resources, Business Money Management and Financial Know-How, Career Development and Business Management Resources, Resume Writing, CV Format, Resume Template, Deep Cleaning Checklist: Easy Guide to Clean Like a Pro, Capricorn-Aquarius Cusp and Its Complexities Explained, 53 Nerdy Dog Names That Are Perfectly Geeky, Choosing a Tent and Sleeping Bag for Winter Camping. A manufacturing company with a flat organization, for instance, would keep its production operations in-house, but may opt to outsource activities from human resources to accounting. Granting promotions based on performance makes more sense cost-wise, since the higher-salary expense will be directly tied to greater productivity. David Ingram has written for multiple publications since 2009, including "The Houston Chronicle" and online at Business.com. The hierarchy still begins with the company’s C-Suite, but there isn’t a “buffer layer” between them and the front-line staff. Taking advantage of staffing agencies for temporary office help is another technique to keep a company lean and flat. When a company utilizes a flat organizational structure, there are fewer, if any, levels of middle management included within the chain of command. A company emergency, like a site explosion, a chemical spill or a weather-related flooding event, can be deftly handled by personnel who are already empowered to take quick action without having to seek approvals through numerous layers of management. It is also referred to as horizontal organization. Ideas come from a wider range of sources in a flat organizational structure than in companies with many layers of management. In a tall organizational structure, by contrast, there are multiple layers of … In a flat organizational structure, there is very little room for employees to move up through the business. An organization with a flat structure is more capable of staying closer to customers and responding more efficiently to their changing needs. A flat structure enables a working environment conducive for personal growth and group interaction. Advantages and Disadvantages of Functional Organizational Structure In this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. This also means that with a flat organization, policies are also easier implemented since they can be communicated more easily. While reporting directly to the company president has its advantages, there are also several disadvantages to this type of organizational structure. Some of the objectives that an organization structure fulfils include; A flat organizational structure is commonly applied in universities, hospitals, restaurants, law firms, and Internet marketing companies. Advantages of Flat Organisation Structure. The adaptability of a flat organization can be especially important when the unexpected arises. The fewer individuals who have to be consulted for a decision, the quicker it is to be made, making a flat organizational structure really beneficial. An organization's structure refers to the nature of the distribution of the units and positions within it, also to the nature of the relationships among those units and positions. Savings can accrue from non-traditional use of external resources as well. It allows a checks and balance for employee performance. As a rule of thumb, managers in flat organizational structures oversee a larger number of employees than in more hierarchical structures. The flat organizational structure eliminates middle management and adopts a more casual, people-powered approach to running a business. This type of structure contributes greatly to reducing costs. Employees and work groups in flat organizations tend to be more adaptable in changing or unique circumstances, due to their smaller hierarchies and lack of bureaucracy. Common knowledge seems to suggest that larger organizations will have multi-level structures whereas smaller ones will have flat organizational structures. If you want to learn more about organizational structure types in Project Management you should check out our 100% Online and Self-Paced Project Management Professional Certification Training . Organizational structure varies in each company. This is not always applicable. As long as […] It gives the employees more autonomy in the organization. Organizational structure should be carefully chosen in order to ensure effective and timely … Why wasn't this page useful? Conversely, if managers within an organization have a smaller span of. In a good organizational structure, the conflicts between individuals over jurisdiction are kept … Another benefit of a flat organizational structure is an increase in coordination and improved communications. There is a maximum return due to the reduction of management levels. A flat structure elevates each employee's responsibility inside the organization and eliminates excess management layers to improve coordination and communication. Open communication and collaboration are encouraged in companies with flat organizational structures. Business Models & Organizational Structure, Organizational Structures in the Workplace, The Difference Between Tall & Flat Organizational Structure, Differences in Hierarchical or Adaptive Structures as Effective Organizational Structures, People Tactics: Rethinking Your Structure -- The Benefits of a Flat Organization, Society for Human Resources Management: Understanding Organizational Structures, Advantages & Disadvantages of Organizational Design, Pros & Cons of a Flat Organizational Structure, Centralized Vs. Something always gets lost in translation, so to speak. Key Difference – Tall vs Flat Structure The key difference between tall and flat structure is that tall structure is an organizational structure with many levels of hierarchy whereas flat structure is an organizational structure with a limited number of levels of hierarchy. Since the top management is much closer to the middle and lower management, there is more efficiency in communicating messages. Moreover, the main purpose of the flat organizational structure is to empower employee. suits the organization in question, and there are advantages and disadvantages to each. As a results, advantages of a flat organizational structure are many. Another advantage is improved customer relations. In a typical flat organizational structure, when a project is not going … It is designed to minimize bureaucracy. In addition, flat organizations often avoid granting salary raises and promotions simply based on length of service. A flat structure is an organisational structure with only a few layers of management. A flat organization (also known as horizontal organization) has an organizational structure with few or no levels of middle management between staff and executives. The Advantages of Horizontal Organization A horizontal organization, also known as a flat organization, is one in which there is little-to-no emphasis on hierarchy and seniority. It creates fewer levels of management. In this article, we are going to review the advantages and disadvantages of each organizational structure: Functional, Projectized, and Matrix. In reality, even some large organizations are exerting efforts to flatten their organizational structures in order to reap the advantages of a flat organizational structure that result from smaller and more manageable channels. If you operate a business, you may wonder about the advantages of a flat organizational structure. A flat organizational structure is designed to be more responsive to the needs of management. The longer the line, the more likely mistakes will be made. Employees are not supervised by many levels of management. Their voices are better heard and their ideas are better entertained. Advantages of flat management Flat management, or even a network-based organizational structure, can provide multiple benefits for organizations at a time when the number of decisions is increasing and leaders must focus on strategic issues more than the day-to-day work. Employees feel more comfortable in sharing their ideas and opinions without the fear of not having a turn to speak up. The lower number of employees who are focused helps in ensuring that the business is able to manage without complicating things for the organization. Flat hierarchies: a general definition. Difference between tall and flat organisation. He has earned a Bachelor of Arts in management from Walsh University. With this healthy exchange of thoughts and opinions, creativity and productivity are enhanced. for the management level. Better Company Culture. Fewer employees means less … In this structure the most trained employees get involved with decision making process. List of Pros of Flat Organizational Structure 1. A flat organizational structure, as its name suggests, has fewer levels of management between managers, executives, and employees. Since all subordinates are submitted to one manager and this gives a short chain of commands and extends the range of control. In flat organizational structures, employees are more empowered, operated with a greater degree of managerial independence and are expected to take responsibility for a range of traditionally managerial decisions in their daily routines. All Rights Reserved. However, the structure of a business is important in accomplishing corporate goals and objectives, achieving greater productivity level and managing employee work needs. Benefits in a Flat Organizational Structure. Combination of two or more different kinds of organizational structures whereas smaller ones will multi-level! 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