Horizontal organization: Difference between revisions
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==Types of benefits == | ==Types of benefits== | ||
By adopting this type of structure, companies can '''reduce their costs''' because of the lack of middle managers, leading to lower wages. Indeed, all costs related to those salaries are gone so the company can '''allocate this [[money]] more efficiently'''. For instance, it can be used to invest in new technologies or to develop new products <ref>Anand, Daft, (2007)</ref>. | By adopting this type of structure, companies can '''reduce their costs''' because of the lack of middle managers, leading to lower wages. Indeed, all costs related to those salaries are gone so the company can '''allocate this [[money]] more efficiently'''. For instance, it can be used to invest in new technologies or to develop new products <ref>Anand, Daft, (2007)</ref>. | ||
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Finally, this type of structure can inspire staff members to have new ideas and be '''more creative'''. Indeed, it introduces experimental approaches and encourages people to rethink the traditional way of behaving in a company. | Finally, this type of structure can inspire staff members to have new ideas and be '''more creative'''. Indeed, it introduces experimental approaches and encourages people to rethink the traditional way of behaving in a company. | ||
==Types of drawbacks == | ==Types of drawbacks== | ||
On the contrary, a horizontal structure can be challenging for both employees and leaders even if there are a lot of advantages to a flat structure. | On the contrary, a horizontal structure can be challenging for both employees and leaders even if there are a lot of advantages to a flat structure. | ||
For example, introducing a horizontal structure requires careful [[planning]] to be effective otherwise it can be a '''source of confusion''' over who has to make and implement decisions <ref>Cunha, Clegg, Gaim, Giustiniano (2007)</ref>. | For example, introducing a horizontal structure requires careful [[planning]] to be effective otherwise it can be a '''source of confusion''' over who has to make and implement decisions <ref>Cunha, Clegg, Gaim, Giustiniano (2007)</ref>. | ||
Latest revision as of 22:25, 17 November 2023
A horizontal structure (also called a flat structure) is defined as an organizational framework where most of the middle management levels are gone. This way, employees have more accountability and autonomy. They can make decisions on their own without asking leaders. Usually, this type of structure is usually used by small firms like start-ups because it is easier to control (fewer employees and projects), but it can be implemented in firms of all sizes [1]. So, generally, the owner of the company constitutes the top management and the rest of the business is composed of the managers and the employees who are at the same level of management. An organizational structure defines the hierarchy in a firm and describes the roles between members [2].
There are many kinds of organizational structures, for instance [3]:
- Hierarchical
- Functional
- Matrix
- Divisional
- Network
- Line
- Team based
- Circular
- Process-based
Types of benefits
By adopting this type of structure, companies can reduce their costs because of the lack of middle managers, leading to lower wages. Indeed, all costs related to those salaries are gone so the company can allocate this money more efficiently. For instance, it can be used to invest in new technologies or to develop new products [4].
It can also help to improve relationships between leaders and staff members. Besides, it can facilitate a faster and simpler decision-making process between them. Employees have more responsibilities, and it can make them feel more motivated. It can lead to better coordination between managers and employees, leading to higher job satisfaction [5].
Furthermore, the distribution of information, like feedback or update, is easier and faster in this type of structure because it does not need to go through many channels. Besides, there is also less chance the information provided is wrong and employees are more aware of the company's goals.
Moreover, a horizontal structure can improve the productivity of staff members. For example, if the approvals of projects are faster, employees can start working on another task sooner. The use of resources (human capital) is optimized. For instance, employees are brought together as a single team rather than separated into many zones. Furthermore, as mentioned above, the distribution of resources and assets is easier among the business group because they combine resources and skills in order to be faster [6].
In general, all of those benefits contribute to positive company culture which can be a good way to attract qualified workers to the organization. Besides, it allows employees to get to know each other better. With fewer management levels, it can help companies to create a more equally supportive professional framework. The owner’s business, managers, and employees are more connected [7].
Finally, this type of structure can inspire staff members to have new ideas and be more creative. Indeed, it introduces experimental approaches and encourages people to rethink the traditional way of behaving in a company.
Types of drawbacks
On the contrary, a horizontal structure can be challenging for both employees and leaders even if there are a lot of advantages to a flat structure. For example, introducing a horizontal structure requires careful planning to be effective otherwise it can be a source of confusion over who has to make and implement decisions [8].
Moreover, having a lack of hierarchy in a company can lead to reduced productivity. Depending on your size, sometimes it is better for the company to have areas (like human resources, and finance) specialized in specific work. Indeed, this type of structure does not encourage the specialization of tasks, so it leads to reduce the number of experts in the organization [9].
Having fewer management levels means the employees can be frustrated at some point because the opportunity of having new qualifications is reduced. Finally, while some employees can find freedom better with a horizontal structure, some others can find it difficult to focus without supervision[10].
There is no unique horizontal organization even if each company shares some specifications because they all have different structures, different problems, and distinct parameters. Choosing the organizational structure is crucial for a new company because it determines many parameters like communication channels, strategies, but also accountabilities of people [11].
Footnotes
| Horizontal organization — recommended articles |
| Radial structure — Functional structure — Organic organization — Delegative leadership — Horizontal communication — Adhocracy — Linear structure — Organizational chart — Distribution of decision-making powers |
References
- Anand, N., Daft, L. R. (2007)Leading Organizations: Perspectives for a new era. Gill Robinson Hickman, 307-311..
- Belasen, T. (2000)Leading the learning organization: Communication and Competencies for Managing Change. State University of New York Press, 121-141.
- Dressler, S. (2004)Strategy, Organization and Performance Management: From Basics to Best Practices. Universal Publisher, 99-102.
- Daft, R. (2013)Organization Theory & Design. Eleventh Edition, 121-124.
- Cunha, M., Clegg, S., Gaim, M., Giustiniano, L. (2022) Designing Organizations. Edward Elgar Publishing Limited, 90-95.
Author: Emma Cartillier
