What Is Horizontal Organizational Structure? (Plus Benefits)

By Indeed Editorial Team

Updated October 7, 2022

Published June 1, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Effective hierarchical structures within organizations can improve team collaboration, productivity and employee satisfaction. A horizontal organizational structure is one format companies may implement, which may have a variety of advantages depending on the size and requirements of an organization. Understanding this structure can help a company manage and motivate its employees and allow them to develop a clear understanding of their roles and expectations.

In this article, we discuss horizontal organizational structure, list some benefits of this method and review its potential drawbacks.

What is a horizontal organizational structure?

Horizontal organizational structures, also called flat organizational structures, outline reporting expectations for employees with only a few hierarchical levels. For example, they may include the owner at the top level, managers or leaders in the middle and the remaining employees occupying the same level within the rest of the business. This differs from vertical or matrix organizational structures because there's typically only one layer for middle management rather than several stratified categories.

Horizontal organizational structures typically allow companies to focus on employees and give more control to individual team members. It can also facilitate more direct lines of communication between managers and employees because there isn't an extensive hierarchical reporting structure.

Related: Comparing Horizontal vs. Vertical Organizational Structures

What are the benefits of horizontal organizational structures?

Here are some benefits of using a horizontal organizational structure:

Increased employee satisfaction

One potential benefit of the horizontal organizational structure is giving employees more control over their roles. At its center, this organizational method is employee-focused and can therefore give employees more autonomy within a business. Removing traditional definitions of roles and their associated status can offer employees more freedom. Without adhering to strict hierarchical titles, the boundaries between positions can be more fluid. This can help team members to expand their roles and responsibilities. For example, a marketing employee could explore search engine optimization efforts, design projects or copywriting for a website.

Related: What Is a Flattened Organizational Structure? (With Benefits and Tips)

Optimized resource use

Another advantage of horizontal organizational structures is their ability to use resources efficiently. There's less compartmentalizing and separation in this type of organizational style. Employees work as part of a single team, rather than within distinctly separated departments. This enables team members to interact and collaborate in many business areas. This can make it easier to share and distribute resources and assets among the team.

For example, if, in a traditional organizational structure, a marketing team needed to purchase photo warehouse software, they may not realize the resource already exists within their company's business development department. With horizontal structures, access to programs and materials can be more accessible because team boundaries disappear and they can interact with one another more frequently.

Related: Traditional Organizational Structure: Definition and Differences

Enhanced flexibility

Horizontal leadership structures can allow more coordination and flexibility between employees because they are all part of the same business group. In a horizontal structure, teams are often more aware of the business's overarching goals and objectives. This level of connectivity can allow a team to change or pivot their strategies as needed. Since there's less ownership of resources and tasks, it can be easier to reconfigure systems and facilitate important projects.

Related: Matrix Organizational Structure: Pros and Cons for Using It

Faster reaction times

In an organization with a horizontal structure, the entire business unit often understands developments as soon as they happen. This allows them to work as a team to dedicate resources quickly and create effective strategies for handling the situation. By combining resources, brainpower and skills, horizontal organizations can sometimes develop faster reaction times that their vertically structured counterparts.

For example, if a new market opened up for a business, employees could dedicate resources to research the target audience and propose a completed marketing strategy to the audience as quickly as possible. Prioritizing opportunities rather than individual department agendas can benefit the overall organization.

Related: 11 Types of Organizational Structure and Design

Increased communication

With fewer management layers, horizontally structured organizations can sometimes help employees communicate their needs and concerns with relevant parties. This organizational style focuses on facilitating teamwork and collaboration. Companies typically try to remove hierarchies to create a more equal and supportive professional environment. For this reason, individual employees can have more direct contact with managers and owners, making it easier for them to share ideas, request resources and present improvements to existing processes.

Related: Interpersonal Communication and Its Importance at Work

Opportunities for synergy

Perhaps one of the greatest benefits of the horizontal organizational structure is its ability to connect employees, management-level leaders and business owners. Removing the traditional reporting expectations can allow team members to think outside their respective areas and make decisions based on the needs of the entire company. Horizontal structures often force employees to work together and question processes that aren't serving everyone equally.

Related: What Is Synergy?

Improved creativity

Along the same lines as improving synergistic opportunity, creative structuring can inspire creative ideas. Companies that incorporate experimental approaches within their structure often encourage employees to rethink traditional modes of thinking in other applications of their work as well. Companies that show employees they're interested in trying a variety of effective strategies rather than only those that they currently use may be more accepting of employees who take risks and strive to rethink standard business practices.

Related: Your Guide to Improving Your Creativity at Work

What are the drawbacks of horizontal organizational structures?

While there are many advantages to horizontal structures, it isn't always the best solution for every company. Depending on your size, goals and individual team members, there can be drawbacks to having a lack of hierarchies within a company.Here are some potential disadvantages of a horizontal organizational structure:

Reduced productivity

In companies where departments' responsibilities are interdependent, horizontal structures may hinder their productivity. While some organizations benefit from reduced managerial levels, others have them so that their areas can specialize and focus on a specific task. Requiring consensus and collaboration from teams sometimes adds layers to processes that could benefit from a more streamlined approach.

Related: How To Improve Employee Productivity

Fewer experts or area leaders

Horizontal structures often discourage specialization, which can mean reduced experts in your business. While this can be beneficial for employees who plan to stay with the company long-term, others may feel frustrated by a lack of advancement potential or their ability to translate their contributions into actionable, resume-building qualifications. This means it's important for horizontal organizations to provide employees with opportunities for professional development and growth.

Related: What Is Professional Development? Definition and Examples

Undefined expectations

Reduced management levels give employees greater freedom. Some may enjoy the autonomy, however, some may find it difficult to focus without clearly defined reporting structures. Not all employees make decisions that prioritize the success of the company. Without supervision, the gravity of those decisions can have major effects on the business's reputation, direction and effectiveness.

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