Traditional organizational structures come in four general types – functional, divisional, matrix and flat – but with the rise of the digital marketplace, decentralized, team-based org structures are disrupting old business models.
Advantages of a Flat StructureIt elevates the employees' level of responsibility in the organization. It removes excess layers of management and improves the coordination and speed of communication between employees. Fewer levels of management encourage an easier decision-making process among employees.
5 Best Organizational Structure Examples (For Any Business)
- Line Organizational Structure.
- Functional Organizational Structure.
- Line and Staff Organizational Structure.
- Project-Based Structure.
- Matrix Structure.
- Organizational Structure Examples: Final Thoughts. Next Steps.
List of Disadvantages of a Flat Organizational Structure
- Management Can Easily Lose Control.
- Work-Relationship Could Struggle.
- It Can Create Power Struggle.
- It Makes Employee Retention Difficult.
- It May Hinder Growth.
- There Is Less Motivation.
- Can Result to Role Confusion.
A flat structure elevates each employee's responsibility inside the organization and eliminates excess management layers to improve coordination and communication. Fewer levels between employees improve the decision-making process among staff.
You can start by embracing these eight principles:
- Trust. Trusting employees is essential for flat organizations, and that trust needs to go both ways.
- Transparency. The most important question managers fail to ask is: “How do I build trust?”
- Confidence.
- Passion.
- Autonomy.
- Fail Fast.
- No Single Point of Failure.
- Agility.
Common disadvantages of hierarchical structures include:
- complicated chains of command which can slow down decision-making.
- inconsistencies in management at different levels which can impede work.
- delays in communicating vertically through the levels and horizontally between teams.
In a flat organization, the ease of connection and ability to make decisions without having to defer to a manager can lead to quicker and more spontaneous decision-making. But the lack of management also means that decision-making is not always transparent, and that makes it hard to know who's got the power.
Nike has a geographic divisional organizational structure. This structure is based on the company's needs in its global organization, as well as the uniqueness of conditions in regional markets.
Nike's flat structure is unique among legacy companies, making this brand an excellent study of the inner machinations of a big business. The company uses this flat structure to maximize transparency and agility among employees and sub-divisions while minimizing bureaucracy and deployment time for new ideas.
Flat structureApple is a very flat organisation, there's not that many layers, and they're just all really involved. Apple is the biggest startup in the world, people work day in and day out because they believe in what they're doing.
functional organizational
Google's corporate structure uses function as a basis for grouping employees. In addition, the company's corporate structure has considerable flatness. A flat organizational structure means that Google's employees, teams or groups can bypass middle management and communicate directly with higher management.
A holacracy is a system for managing a company where there are no assigned roles and employees have the flexibility to take on various tasks and move between teams freely. The organizational structure of a holacracy is rather flat, with there being little hierarchy.
A tall organization, or vertical organization, is one in which the CEO sits at the top of the chain of command, with various levels of management underneath. A flat organization, or horizontal organization, involves fewer levels of management and more employee autonomy in the decision-making process.
While traditional organizational structures have defined vertical and horizontal borders and hierarchies, boundaryless organisations are defined specifically by a lack of structures and an approach to business that is based on the free flow of information and ideas to drive innovation, efficiency and growth in a world
Amazon employees are organized across 12 levels of hierarchy. The organization is very flat, relative to other companies of this size. While there are so many people at lower levels, the count of senior leaders is very small.
The flat structure that cancer research uses is helpful for them achieving their strategic goals because the shareholders choose carefully who they wish to be the directors of the business and run everything on a day to day basis, to help them achieve their goals.
A functional organization is a common type of organizational structure in which the organization is divided into smaller groups based on specialized functional areas, such as IT, finance, or marketing.
Hierarchy ensures accountabilityAn effective hierarchy makes leaders accountable for results, and provisions for their replacing failures with someone new — sometimes through internal promotion. That's how hierarchy ultimately serve the success of the organisation as whole — including owners, managers, and employees.
Tall and flat hierarchical structures:For example, the McDonald's restaurants all have a flat structure. The manager in each place of business controls the other assistants and employees.
A hierarchical structure refers to a company's chain of command, typically from senior management and executives to general employees. In other words, this structure applies to organizations with a sole leader and a flow of subordinates underneath them.
Part of what's interesting about Amazon's matrix is that it's eco-system-wide and not just system-wide. They own relatively little. Others design and make the products they sell. Others do the actual physical delivery.
The flat organization model promotes employee involvement through a decentralized decision-making process. By elevating the level of responsibility of baseline employees and eliminating layers of middle management, comments and feedback reach all personnel involved in decisions more quickly.
