If you operate a business, you may wonder about the advantages of a flat organizational structure. A flat organizational structure, as its name suggests, has fewer levels of management between managers, executives, and employees. It is also referred to as horizontal organization. It is called flat because the name points to the organization's feature of creating a smaller hierarchy for its staff. As opposed to other structures like huge pyramids with lots of layers, a flat organization is much smaller in scale. As a results, advantages of a flat organizational structure are many.
Why Consider a Flat Structure for Your Organization
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. A flat organizational structure is commonly applied in universities, hospitals, restaurants, law firms, and Internet marketing companies.
Understanding the Advantages of a Flat Organizational 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. One of the main advantages of a having a flat organizational structure is reducing the overall costs of operations. This type of structure contributes greatly to reducing costs. In particular, fewer levels means fewer employees. Fewer employees means less expenses for payroll and office space. Plus, since when there are fewer people each person is more accountable, a flat structure can encourage better productivity, and more work gets accomplished.
Another benefit of a flat organizational structure is an increase in coordination and improved communications. Since there are fewer departments, information is better relayed. Since the top management is much closer to the middle and lower management, there is more efficiency in communicating messages.
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 longer the line, the more likely mistakes will be made. Something always gets lost in translation, so to speak. 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.
Effective communication will eliminate any delays in decision making by managers and executives, thereby allowing work to go on smoothly. This also means that with a flat organization, policies are also easier implemented since they can be communicated more easily.
A flat organizational structure will also enable all employees to participate in all activities of the organization. Their voices are better heard and their ideas are better entertained. Employees feel more comfortable in sharing their ideas and opinions without the fear of not having a turn to speak up.
With this healthy exchange of thoughts and opinions, creativity and productivity are enhanced. In other words, a flat structure helps employees become effective team players and independent thinkers. A flat structure enables a working environment conducive for personal growth and group interaction.
Employees are also more willing to learn new skills from colleagues, helping them become more efficient workers. Cross-training is therefore inevitable. With a flat structure, employees get to work closely with managers and executives and so learning and training will take place continuously.
A flat structure will also allow the organization to see which employees are contributing more and which ones are more passive. It allows a checks and balance for employee performance.
Another advantage is improved customer relations. An organization with a flat structure is more capable of staying closer to customers and responding more efficiently to their changing needs. Plus, because bureaucracy is reduced, there is more equality among the employees. Each employee will have a better sense of commitment and ownership when it comes to his or her job. Each employee will feel more empowered to impart his ideas and to execute them with more confidence.
Who Benefits Most?
Common knowledge seems to suggest that larger organizations will have multi-level structures whereas smaller ones will have flat organizational structures. This is not always applicable. 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.