Flat organisations


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Flat organisations

  1. 1. Flat Organisations Submitted to: Dr. Cherian P Kurien, School of Social Work, Marian College, Kuttikkanam. Submitted by: Bimal Antony, II MSW, No. 111, School of Social Work, Marian College, Kuttikkanam. Date of Submission: 30th January 2012.
  2. 2. IntroductionAn organisation structure specifies the various job tasks and shows how the same are formallydivided, grouped, and coordinated. It provides an appropriate framework for authorityrelationship. It indicates the hierarchy of authority and the reporting relationships. It is a meansto help the management to achieve the organisational objectives. As the objectives of theorganisation are derived from the overall strategy of the organisation, it is logical that anorganisation structure is closely linked to its strategy. As such, if the management makes asignificant change in the organisation’s strategy, the organisation’s structure needs to bemodified to accommodate and support the change. There is considerable evidence to indicate thatchoice of an organisation’s strategy is determined by three basic factors such as (i) theorganisation’s size, (ii) technology used by the organisation, and (iii) environmental uncertainty.Information technology and globalisation have had a tremendous impact on organisationstructures. Many of today’s managers realise that the traditional organisation structures based onbureaucratic principles no longer provide solutions to the challenges posed by the new paradigmenvironment. The needs of flexibility, adaptability to change, creativity, innovation, knowledgeand the ability to overcome environmental uncertainties are among the biggest challenges facingmany of the organisations. The result has been that the vertical (tall) structures are being replacedby horizontal (flat) structures; the organisations with mechanistic structures are beingtransformed into ones with organic structure. These shifts reflect a clear departure from thepractice of centralised decision-making to decentralised decision-making, from command toconsensus based self-control.Flat OrganisationsThe flat organisation structure is a bottom-up approach. A Flat organisation structure is alsoknown as a horizontal organisation. It is a level wherein there are very few or often no levels ofmanagement between the staff and the managers. In such an organisation the most trainedemployees are involved in the decision making process. This structure mostly takes place insmaller organisation. A flat structure is less bureaucratic because fewer managers review thework of others, and the structure is less authority-laden. A flat structure leads to a wider span ofcontrol, the number of workers reporting directly to a manager.SignificanceWith the help of flat organisation structure the decision making process mostly involves most ofthe employees. Every employees feedback as well as opinion is taken into consideration. Due tothis kind of structure employees and the top management interact on regular basis and there is avery understanding bonding that takes place in the organisation. The basic premise of the flatorganisation structure is that having well-trained workers who have a true voice in dailyoperations means they will be more productive because they’ll have a viable interest in seeingthe company succeed, since they’re also now responsible for operations. Allowing the staff to
  3. 3. have the authority to make on-the-spot decisions can go a long way towards promoting positivecustomer interactions.FeaturesThe traditional hierarchical organisational structure can be illustrated by using a pyramid, withbaseline staff on the bottom and increasing levels of management leading up to the president orCEO of the company. A flat organisational structure also has a pyramid shape, but its a muchbroader and flatter pyramid, with fewer levels between the top of the pyramid and the bottombase. The organisational pyramid also may consist of different departments, with a departmenthead or manager leading each unit and the executive management staff forming the top of thepyramid.Benefits of a Flat Type Organizational StructureStructureFlat organisations have relatively few--sometimes just one--layers of management. Flatstructures have a short chain of command and a wide span of managerial control. In a flatstructure, more subordinates report to a single manager.Better CommunicationFlat structure facilitates a greater level of communication between employees at all levels. Flatorganisational structures remove barriers between top-level managers and front-line employees.Communications flow across the organisation instead of from the top down. Another aspect ofthis management structure is that Informal communications and honest critiques occur betweenpeers more easily than from managers to subordinates. They tend to be more democratic andoffer a greater level of innovation. Communication is usually faster, more reliable and moreeffective than in tall structures.
  4. 4. Organizational FlexibilityOrganizations with fewer levels between managers and employees can more easily implementstrategic management plans, take action steps for short-term goals and take action on policy andprocedural changes. By acting on a level closer to front-line employees, managers can monitorprogress toward goals and objectives as well as receive more immediate feedback regarding thefeasibility of a specific action plan.Organizational ResponseFlat management structures allow lower-level managers more latitude to make strategicdecisions, implement action plans and communicate these changes to front-line employees. Thisempowerment can decrease the time it takes to react to new opportunities or business threats.Share Organizational GoalsFlat organisational structures include lower-level managers in the goal-setting process andempower them to help the company reach those goals. This shared process can foster communityand create shared organisational goals.Decision MakingThe level of flexibility means decisions are made on an “as needed” basis, which makes it easierto serve the clients. In a tall organisation, a staff member needs approval from a supervisor whoneeds approval from a manager, and so on, before a decision is made. In a flat organisation, staffmembers have more power and can make some decisions immediately.Performance, Production and ProfitabilityThe flat structure revolves around qualified and competent staff. Fully engaged, skilled workgroups leads to happier workers and high turnover. When employees are more responsible foroperations, they take more pride in the companys success. In addition to increased productivity,organisations using a flat structure can experience leaner budgets by eliminating costly middle-management salaries. This can lead to a decrease in employee expense and an increase in profits.Challenges of Flat Organizational StructureMotivational LeadershipAn advantage of a flat organisational structure is that it places more responsibility on individualemployees to motivate themselves and maximize their performance. This creates challenges atthe same time, however, because employees have fewer leaders to motivate them and give themindividual attention. Not every personality type thrives in a self-starting environment; some
  5. 5. employees need managers for guidance, instruction and motivation. The challenge in flatorganisations is to create a company culture that encourages self-motivation and breakingpersonal performance records.ConsistencyOrganizations with less of an emphasis on supervision can be lacking in strict operationalpolicies, creating a situation in which different employees handle different situations in differentways. The same customer complaint may be handled differently on different days, for example,sending conflicting messages to the marketplace. Or some employees may find a way to sellproducts that are inferior in some way, while others throw away damaged goods, creatingdiscrepancies in product quality and company costs.Decision-MakingStrategic decision-making in flat organisations can become complicated and inefficient if acompany relies on voting or building consensus among its employees. Companies with flatstructures who find themselves facing a decision with far-reaching consequences may find itchallenging to address the issue quickly and decisively.AdvancementEmployee development programs take on new challenges in flat organisational structures. With ahigher ratio of front-line employees to managers, there are fewer managers to take note of theindividual performance levels of employees. This can make it easier for high-performers to fallthrough the cracks in performance reviews, possibly causing them to leave the company to find aposition with more personal recognition. In addition to this, there are fewer managerial positionsin which to promote front-line employees, reducing the advancement opportunities presented toeach employee.Advantages of Flat Organisation StructureBenefits or advantages of a flat organisation structure are as follows:Flat Organisation is less costly because it has only few managers.It creates fewer levels of management.Quick decisions and actions can be taken because it has only a few levels of management.Fast and clear communication is possible among these few levels of management.
  6. 6. Subordinates are free from close and strict supervision and control.It is more suitable for routine and standardised activities.Superiors may not be too dominating because of large numbers of subordinates.Disadvantages of Flat Organisation StructureLimitations or disadvantages of a flat organisation structure are as follows:There are chances of loose control because there are many subordinates under one manager.The discipline in the organisation may be bad due to loose control.The relations between the superiors and subordinates may be bad. Close and informal relationsmay not be possible.There may be problems of team work because there are many subordinates under one manager.Flat organisation structure may create problems of coordination between various subordinates.Efficient and experienced superiors are required to manage a large number of subordinates.It may not be suitable for complex activities.The quality of performance may be bad.ConsiderationsFlat organisation structures work best with smaller companies, where its possible to decentralizesome decision-making while maintaining corporate integrity. Large companies spread out acrossmultiple states may have a more difficult time using a flat structure, because it can result in uppermanagers having a loss of control of the functions of the business. Large companies can use aflat organisation structure by setting up each division with a flat organisational structure whilemaintaining corporate controls and final approval on decisions at the executive level.