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What Is a Flat Organizational Structure?

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  • Written By: Osmand Vitez
  • Edited By: PJP Schroeder
  • Last Modified Date: 10 November 2014
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A company uses an organizational structure to define the management layers among employees. A flat organizational structure has few managers between the chief executive officer or president and the lowest-level employees. Organizations with highly skilled workers typically use this structure. The purpose is to allow individuals more autonomy in their daily work activities. Small decisions require no management insight; major decisions either need a committee or management insight.

Many companies draw their organizational structures on charts. This presents the organizational structure in graph form. Executive management is in the top level, with each manager separated by boxes. Beneath each management box, lines connect the management position to other boxes of lower managers. This process continues until the company outlines all positions in the flat organizational structure.

The flat organizational graph tends to be wide rather than tall. This is how the structure gets its name because the graph looks flat on paper. When a company adds new positions, they must fall somewhere on the graph. Flat organizations typically do not add new management layers. They simply extend the width of the graph; this may involve a new manager or committee to oversee a different part of the company’s operations.

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A decentralized decision-making process is an essential piece of the flat organizational structure. This places decision-making responsibilities with employees who are closest to the situation. Highly skilled employees typically have the technical and educational background to make good decisions. Decentralized systems allow for quicker decisions as employees waste little time waiting for approval from upper management. This also improves the fluidity of organizations as they may be able to take advantage of situations quicker than competitors.

Customer response can also be better in this type of organizational structure. As decision makers reside at lower organizational levels, customers can receive feedback and problem resolution quicker. Frequent customer interaction also creates more goodwill between the company and its customers. This creates a competitive advantage over competing firms.

For all its benefits, a flat organizational structure does have flaws. Little management oversight can result in workers wasting time throughout the day. Upper management may also be too far removed from daily decisions, creating difficulties for them to properly understand their business. A lack of highly skilled employees is another problem that weakens this organizational structure. Employees who cannot properly supervise themselves, set their schedules, or respond to department requests on time can create organizational problems.

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Misscoco
Post 4

I would think that anyone who is the owner or CEO of a company organized with a flat structure would need to be very careful in hiring the managers at the various positions. These employees would need to be highly trained in skills such as decision-making, creative thinking, ability to work well with clients and employees, and able to use initiative.

I imagine they would be well-paid as they are responsible for one portion of the business. With this kind of organization, the managers' focus might be too narrow - not seeing the big picture.

PinkLady4
Post 3

I guess that schools would be under the category of a flat organizational structure. Most teachers within a school have about the same skills, abilities and duties. They develop their own teaching styles and are responsible for managing and educating kids.

If they need help, their manager is the principal. But they often go ahead and make their own decisions, because the principal doesn't have enough time to serve all the teachers.

In K-12 schools, there are no managers scattered below the principal, but in colleges and universities, you have various manager positions between the college president and the professors.

Azuza
Post 2

@indemnifyme - I think you're describing a situation where flat organizational structure makes sense-you all have the same kind of skills and license. I think there are a few situations where a flat organizational structure would not make sense.

For example, a hospital. The people that work there have varying qualifications and skills. There needs to be several layers of "managers" empowered to make different kinds of decisions. I can see how the decision making process would be slower, but sometimes that's the price you pay for a correct decision!

indemnifyme
Post 1

The insurance office I work in definitely has a flat organizational structure. Everyone in the office is licensed to sell insurance and has authority to deal with customer issues. So all the employees are on equal footing.

The only person above us is the actual agent who owns the office. But really, his qualifications aren't very far beyond the rest of ours. He leaves a lot of decision making power in our hands and has even told us that if anyone asks to talk to a "manager" to tell them we're empowered to help them and there is no one above us.

Honestly, this structure definitely has pros and cons. For me, it's frustrating that my "boss" doesn't know that much more than I do about the industry. I feel like if I need help, there's nowhere to go.

But, like the article said, we're definitely able to resolve customer issues quickly, because we can all do it. We don't have to wait for a manager to approve our decisions.

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