Pros and Cons of Flat Organizational Structure

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A flat organizational structure is used by a business that has fewer management layers, but its management team has a wider range of authority over staff members. This business model can be very advantageous to a company, as it thrives on the suggestions and input of employees, instead of executive decisions to which employees are not allowed to contribute ideas. However, it can also backfire if not used properly, which might lead to anger and mistrust from employees. While this type of organizational structure has been used for quite a while by many medium and large-scale companies, start-ups and small enterprises should weigh down its pros and cons first carefully before deciding to implement it.

List of Pros of Flat Organizational Structure

1. It requires fewer hoops.
The fewer individuals who have to be consulted for a decision, the quicker it is to be made, making a flat organizational structure really beneficial. There will be far less people and managers to consult on the critical things to be done within the organization.

2. It is more cost-efficient.
In this type of business model, the need for many managers is reduced, which entails that there will be less wages to pay for such individuals.

3. It leads to less supervision and dominance.
While some people strongly argue that this is an absolute con of this type of structure, there are also those that beg to differ. As you can see, less management also means less time for managers to do their jobs and micromanage employees. As a result, it can lead to a high sense of responsibility among workers, which means a higher level of productivity.

4. It ensures clear communication.
Naturally, a small level of authority figures in business would lead to more effective communication. The input that is taken directly from employees would also lead to less behind-the-curtain schemes and operations to occur.

List of Cons of Flat Organizational Structure

1. It brings about a struggle in work relations.
When there is a lot of employees to handle, managers would find it hard to connect with their people on a personal level, as they simply have so many of them to look out for. This would have a huge impact on the morale and respect in the company on all authority levels.

2. It risks loss of control.
When the ratio of managers to employees is too out of order, it will be easy to lose control of a certain situation. As you can see, a flat organizational structure means less people to stop bad behavior and even lesser people to support their decisions.

3. It makes employee retention difficult.
Everybody wants a promotion, and outstanding employees who are looking to improve their ranks, apart from increasing in their salary, may find it difficult to achieve job satisfaction in this type of organizational set up. So, they might end up searching for jobs somewhere else, where their efforts will be rewarded with promotions.

These are just some of the pros and cons of flat organizational structure that you should assess. As you learn to be familiar with both sides of the coin, you can then begin deciding whether it will be helpful to your business or not in the long run.