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Flat organizations eliminate middle management to promote direct contact between executives and employees. This structure can streamline operations, promote accountability and innovation, and be cost-effective. It may work best in small companies but can be adapted for larger ones.
A flat organization eliminates as many middle management positions as possible to put executives in direct contact with employees on the ground. This approach can work well in a small company with a limited number of employees, where it is possible for executives to oversee operations. In larger companies, some middle management may need to be added for functionality, but individual departments and task forces can operate with a horizontal management structure. Some companies thrive when organized this way because it can promote efficiency and accountability.
An advantage of simple organization is that it can streamline operations. In a store, for example, individual employees can act with considerable autonomy to quickly resolve customer complaints. They can be held accountable for their actions later in a meeting with an executive. This can encourage employees to take an active role in decision-making and support the decisions they make. For customers, this can result in greater satisfaction and a feeling that the company responds to their needs.
Projects can move forward faster and with less disruption in a flat organization. Instead of having to make decisions through a series of employees, teams can move quickly to develop projects after receiving approval from an executive. The same rationalization can also help companies resolve issues quickly. If a new product is defective, for example, teams can immediately start analyzing and developing proposals to solve the problem.
Reducing hierarchy can be cost-effective. Flat organizations tend to cost less to run because they include less administrative staff who may not directly contribute to production and day-to-day work. In a smaller company, this could be an effective method to focus resources and help the company grow. As it expands, it may be necessary to consider another level of staff to handle management and delegation when they begin to grow beyond the control of individual executives.
In some cases, employees can be happier in a flat organization. They may feel they play a more direct and active role and have a reason to invest in the company’s future. Reducing personnel layers can also encourage innovation and open discussion, as employees may feel freer to speak up when they have a direct connection with executives. This can help companies identify flaws in products and services early on, soliciting information from people who can spot problems and feel comfortable talking about them in a flat organization, where they have more power as individuals.
Asset Smart.
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