There must be strategies in place to deal with the potential negatives which like to occur under this structure. Highly-skilled workers also like having opportunities to advance upward through the chain of command. There is also a lot of time spent talking with others to ensure that an idea isn’t being duplicated before it is presented. This con can have a great impact on the issue of respect and morale of an organization on levels of authority. Some founders do make a conscious decision to have a flat organization but it usually occurs organically when a small team of specialists come together to pursue a business idea. Flat Structure Improves Communication One of the disadvantages of a tall organizational structure is the slow rate of communication due to the number of management layers between executives and staff employees. A flat organizational structure is defined by few management layers that have a broader span of authority. Fewer people have to be consulted about a decision, allowing the management to provide rapid response to any issues or concern. 2. 4. 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 … The lower number of employees who are focused helps in ensuring that the business is able to manage without complicating things for the organization. It is more cost-efficient. 3. However, the structure of a business is important in accomplishing corporate goals and objectives, achieving greater productivity … Like many other organizational structures, the flat organization structure also has its share of advantages and disadvantages. Let us now take a look at its limitations.1. This structure isn’t scalable, so fast growth in an SMB or startup can cause the C-Suite to lose control over their workplace. Management Can Easily Lose Control As mentioned above, this structure is ideal for startups and small business where the number of employees is still manageable. for the management level. The flat organizational structure is most common in young startups and small businesses. The cost structure of a business is improved. Because there is a lack of management definition in most flat organizational structures, a power vacuum is created when the C-Suite is not present. It can improve employee retention. 6. The system can pose a problem to the whole organization when the ratio of employees to managers become too out of proportion. In comparison to a tall organizational structure, a flat organisation structure has fewer levels of management and therefore a short chain of command. There is less miscommunication. 1. This structure works well for small organizations, but what happens if a company experiences high levels of growth over a short period? In other words, employee involvement is promoted by decentralizing the decision-making process and elevating the levels of responsibility of employees. That lessens their effectiveness and ultimately is costly to the employer. It Can Create Power Struggle Under this organizational structure, it is observed that employees often lack a specific boss to report to, especially when the owner or CEO is not around. 2. Then, of course, flat organizational structure is for everyone. 3. A line organisation has only direct, vertical relationships between different levels in the firm. The flat organization supervises employees less while promoting their increased involvement in the decision-making process. That bickering leads to confusion, which leads to resentment, and that leads to a lack of productivity. There will be far less people and managers to consult on the critical things to be done within the organization. It creates a direct communication line between the person sitting behind the desk (the owner or CEO) and the people on the front line (the workers). Startups and small business should weight its advantages and disadvantages before deciding to implement it in their own business. That improves employee morale. When the businesses start growing with a lot of additions however there is a need to adopt a formal structure. Flat organisational structure is a structure where there are no levels or very few levels between managers and staff. Functional structure. … Thus, carefully consider the pros and cons discussed above before adopting this structure in your own organization. Some companies, even when they have already grown or expanded retain a flat structure. So, we have already pointed out the advantages of a flat organizational structure. The advantage of this horizontal organizational structure is that it allows decisions to be made faster. Instead of relying on an intercessory, the C-Suite gathers information directly from the source and this can limit the amount of miscommunication that can occur at the workplace. The growth can be in the for… It isn’t scalable. Employees in this type of structure do benefit from being able to approach the C-Suite with their ideas. Let us now take a look at its limitations. Instead of having a defined role, many companies that incorporate a flat organizational structure tend to ask people to do a little bit of everything. The disadvantage of using the flat organizational structure is that it can create role confusion within highly structured teams. Advantages of a flat organizational structure. There are advantages to this -- it lowers the problems caused by unhealthy competition. One of the greatest costs to the annual budget for a business is labor. Every structure has certain challenges that must be met, but when these negatives are proactively approached, their impact to the business and each worker can be effectively minimized. 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 . The system can pose a problem to the whole organization when the ratio of employees to managers become too out of proportion. There is a lack of work-life balance. When a company utilizes a flat organizational structure, there are fewer, if any, levels of middle management included within the chain of command. It is one of those organizations where the employees literally get to practice the freedom of speech and their work rights that are the … Flat organizational structure helps avoid this by allowing the upper management to take direct input from employees, and vice versa. 5. It can hinder employee retention. 3. 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. It Is Cost Efficient As mentioned, in this organizational structure, there are fewer (or no) manager layers between the executive and the staff. It Requires Less Dominance and Supervision Many believe that a company’s head must be able to monitor and manage anything and everything that is happening inside his or her organization, including the employees. Matrix Organizational Structure: Advantages, Disadvantages & Examples What Is a Flat Structure in an Organization? Organizational structures play a key role in effective communication and decision-making. Is Tesco a tall or flat structure? This is because the less time managers have to helicopter and micromanage their employees, the more productive employees can get in day as these can give them a higher sense of responsibility. Often times, you will see this model used in very small businesses, where there is a lack of middle managers because there are too few employees to handle. There can be a lack of responsibility definition. Although access is a benefit, because there are not continuous lines of communication between varying departments or teams, a lot of time can be wasted when trying to be innovative. Because this organizational structure is based on direct contact, there are fewer opportunities to misinterpret feedback or ideas. Tall and flat organisations The staff structures of a tall organisation and a flat organisation Tall organisations Advantages. It is a structure that improves employee morale. 5. There Is Less Motivation While a flat organization structure may lessen the problems caused by unhealthy competition among employees, it makes it harder for ambitious workers to move up the ladder as there is very little room up there. Advantages, Disadvantages and Impact. The cost structure of a business is improved. By eliminating multiple layers of middle management, a flat organizational structure can quickly save hundreds of thousands, if not millions, of dollars for certain businesses. Benefits in a Flat Organizational Structure One of the disadvantages of a tall organizational structure is the slow rate of communication due to the number of management layers between executives and. For many workers, career satisfaction isn’t just about the size of the paycheck. 7. An example often used to … It also involves a chance to pursue their passions and this business structure can make that happen. 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