When Shall We Use Flat Organization Structure Rather Than A Narrow One?


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Rajesh Shri Profile
Rajesh Shri answered
Different companies have different organization structures. In most organizations it is a pyramid but the angle of the pyramid varies. What I mean by the angle of the pyramid is how many layers it really has. There are pluses and minuses of having a flat organization structures rather than a very steep one. These organizations have very few levels. Some times it could be as few as three levels.

This kind of flat organization structure is preferred when the company or organization has many parallel departments which are more or less equal to each other and specialized. Here the departmental head has to be a technically knowledgeable person and must have the necessary competence to drive the entire department. He may have empowered work groups working for him with a group leader heading each team to help him out. The next higher level could be a vice-president level with all department heads reporting directly to him.

An example of a flat structure is an university where each department is headed by a head of the department and all such heads report directly to the dean. Another such example could be from the semiconductor manufacturing industry where each specialized process is headed by a manager who in turn report directly to the flat manager.
Ted McNicol Profile
Ted McNicol answered
Organization structures reflect the need for direction and decisions from higher levels within an organization.  The ideal organization structure is very flat, with almost all decisions being made by the person who is servicing customers.      However, as an organization grows in size, the need for consistent decision-making and actions becomes more important.  Therefore more direction is needed and a senior position becomes necessary.  The senior position becomes responsible for coordinating the group's activities in the most efficient, revenue-generating and/or cost-controlling manner.      The senior position's capacity to direct more than a few individuals is impacted by the homogeneity of the jobs below.  For instance, a supervisor can direct many people doing the same tasks but if there is a lot of differentiation in the lower level positions, that supervisor's capacity is reached much sooner.  A common yardstick for direct reports is no more than 15 people performing the same task, since the supervisor still has to assess performance, training needs, schedule work/vacations and monitor the operation.    There is a natural tendency for people to want to be promoted and organizations that are inattentive can find many extra layers being tacked on.  If such a change is short-term in nature (i.e. Mentoring/training a replacement), that isn't an issue but if extra layers become embedded in the organization they will impact efficiency.    Remember that each layer added to the organization is a filter from the CEO (or Board) to the employee actually doing the work.  Messages become unclear and effort can be misdirected or wasted if unnecessary layers exist.

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