What Is a Flattened Organizational Structure? (Plus Tips)
Updated February 3, 2023
Determining the organizational structure of a business is one of the most important first steps in forming a new company. The hierarchy of a business determines all future communication channels, management strategies and responsibilities for team members. Business stakeholders typically opt for a flattened or hierarchical structure, depending on how they want to organize different departments and individual employees.
In this article, we define a flattened organizational structure, describe its benefits, explore the flatarchy subtype and provide tips for implementing a flattened organizational structure.
What is a flattened organizational structure?
A flattened, or horizontal, organizational structure is a business hierarchy with few levels or foregoes implementing any levels at all. In a flat structure, there aren't as many steps between an entry-level employee and the company's chief executive officer (CEO), meaning that most staff members have a heightened level of responsibility and autonomy in their work and an increased ability to make important decisions without consultation. At a minimum, a flattened organizational structure eliminates middle management roles.
Benefits of a flat organizational structure
There are several benefits to a flat organizational structure, including:
Because there isn't a middle management tier, most employees have more responsibility than they may have otherwise. This can help them feel motivated, valued and more invested in the company they work for, all of which offer their own benefits, like higher job satisfaction and increased willingness to work as a team. More responsibility also means increased accountability, as employees can hold themselves and their coworkers accountable.
Easier dissemination of information
In a hierarchical organizational structure, any company news or other types of information, like procedural updates, usually goes through many channels before certain employees learn about it. In a flattened organizational structure, this dissemination of information is much easier and faster and introduces less of a chance that an employee receives incorrect or incomplete information. When information sharing is simple, employees can use the information in their work, which can positively impact the whole organization.
Lowered operational costs
Because there are no middle management salaries to pay, an organization that adopts a flattened structure may also realize lower operational costs related to selling, general and administrative (SG&A) expenses. This can help a business allocate those costs more efficiently. They might invest more in matters like expanding the company, developing new product lines, enhancing training for employees, offering bonuses and raises to staff or purchasing additional manufacturing equipment.
You may find that a flattened organizational structure allows for better coordination between team members managing a project together. With fewer levels of management to get approvals, employees are commonly responsible for their own work and may develop more teamwork abilities. This can help them come to shared conclusions on procedures quicker than otherwise.
Because of the autonomy, empowerment and coordination that come with a flat organizational structure, employees are usually more productive as well. Project approvals are typically faster, allowing employees to start work sooner and finish tasks earlier. High productivity can help a business succeed and employees feel motivated, which leads to higher job satisfaction, willingness to manage new responsibilities and loyalty to the organization.
Positive company culture
Without so many layers of management to work through, there's a greater likelihood that employees get to know one another. This, as well as accountability, fairness in roles, autonomy and enhanced communication, all contribute to positive company culture. Great company culture also attracts top talent and qualified candidates who want to work for the organization.
Who should use a flat organizational structure?
A flat organizational structure is most common in smaller businesses where employees can have a lot of responsibility and direct access to executives without affecting the company's productivity. If a larger corporation uses a flat organizational structure, it's also common that they have a set process implemented that can operate well, even without middle management involvement. Also, companies that value creativity and decision-making may want to use a flattened organizational structure.
What is a flatarchy?
A flatarchy is a subtype of a flattened organizational structure. In this structure, there are few to no levels of management. Smaller companies with fewer employees are often the most likely to employ this structure, but it can work for companies of all sizes. Only a single manager might separate the company executives or owners from the other employees. The flatarchy name is a hybrid of a hierarchy and a flat organization.
Tips for implementing a flattened organizational structure
Examine these tips to implement a flattened organizational structure in the workplace:
Decide how flat to go. A flattened organizational structure doesn't have to be completely flat. Instead, a business can opt for a more flat structure than you'd find in a hierarchical structure, with some levels of management as needed.
Develop an open-door policy. If there isn't already an open-door policy, create one so employees know that they have direct access to executives for questions, concerns or ideas they may have. It's important that employees feel comfortable approaching others in the business who're at the top of the hierarchy, so policies should be clear about their ability to do so.
Provide access to resources. Because employees have the opportunity to solve problems and work independently without the input of multiple layers of management, they need access to the resources they need. Consider developing a hub where all employees can access the information they need about policies, procedures, processes and more so they can make informed decisions and feel in charge of their own actions.
Create ways for employees to develop within the company. If you adopt a flattened organizational structure, employees may have fewer opportunities to advance within the company, at least in a traditional sense. However, for many employees, it's important that they be able to continue to grow within the business, so create ways for them to accomplish that within your structure.
Communicate expectations. Even though employees have autonomy and the power to make decisions they feel are necessary without many layers of managerial approval, they should still know what others in the organization expect from them. This can give employees direction and help them feel comfortable performing their day-to-day tasks.
Develop training opportunities. Proper and complete training is necessary to feel supported as an employee in the middle of a flattened organizational structure. Think about the most important things to communicate to employees, from new hires to more seasoned staff members, and develop the training programs you need, so they feel confident in their future success.
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