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.

Flat Organisations

Introduction
An organisation structure specifies the various job tasks and shows how the same are formally divided, grouped, and coordinated. It provides an appropriate framework for authority relationship. It indicates the hierarchy of authority and the reporting relationships. It is a means to help the management to achieve the organisational objectives. As the objectives of the organisation are derived from the overall strategy of the organisation, it is logical that an organisation structure is closely linked to its strategy. As such, if the management makes a significant change in the organisations strategy, the organisations structure needs to be modified to accommodate and support the change. There is considerable evidence to indicate that choice of an organisations strategy is determined by three basic factors such as (i) the organisations size, (ii) technology used by the organisation, and (iii) environmental uncertainty. Information technology and globalisation have had a tremendous impact on organisation structures. Many of todays managers realise that the traditional organisation structures based on bureaucratic principles no longer provide solutions to the challenges posed by the new paradigm environment. The needs of flexibility, adaptability to change, creativity, innovation, knowledge and the ability to overcome environmental uncertainties are among the biggest challenges facing many of the organisations. The result has been that the vertical (tall) structures are being replaced by horizontal (flat) structures; the organisations with mechanistic structures are being transformed into ones with organic structure. These shifts reflect a clear departure from the practice of centralised decision-making to decentralised decision-making, from command to consensus based self-control.

Flat Organisations
The flat organisation structure is a bottom-up approach. A Flat organisation structure is also known as a horizontal organisation. It is a level wherein there are very few or often no levels of management between the staff and the managers. In such an organisation the most trained employees are involved in the decision making process. This structure mostly takes place in smaller organisation. A flat structure is less bureaucratic because fewer managers review the work of others, and the structure is less authority-laden. A flat structure leads to a wider span of control, the number of workers reporting directly to a manager.

Significance
With the help of flat organisation structure the decision making process mostly involves most of the employees. Every employee's feedback as well as opinion is taken into consideration. Due to this kind of structure employees and the top management interact on regular basis and there is a very understanding bonding that takes place in the organisation. The basic premise of the flat organisation structure is that having well-trained workers who have a true voice in daily operations means they will be more productive because theyll have a viable interest in seeing

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Flat Organisations

the company succeed, since theyre also now responsible for operations. Allowing the staff to have the authority to make on-the-spot decisions can go a long way towards promoting positive customer interactions.

Features
The traditional hierarchical organisational structure can be illustrated by using a pyramid, with baseline staff on the bottom and increasing levels of management leading up to the president or CEO of the company. A flat organisational structure also has a pyramid shape, but it's a much broader and flatter pyramid, with fewer levels between the top of the pyramid and the bottom base. The organisational pyramid also may consist of different departments, with a department head or manager leading each unit and the executive management staff forming the top of the pyramid.

Benefits of a Flat Type Organizational Structure

Structure Flat organisations have relatively few--sometimes just one--layers of management. Flat structures have a short chain of command and a wide span of managerial control. In a flat structure, more subordinates report to a single manager. Better Communication Flat structure facilitates a greater level of communication between employees at all levels. Flat organisational structures remove barriers between top-level managers and front-line employees. Communications flow across the organisation instead of from the top down. Another aspect of this management structure is that Informal communications and honest critiques occur between peers more easily than from managers to subordinates. They tend to be more democratic and

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Flat Organisations

offer a greater level of innovation. Communication is usually faster, more reliable and more effective than in tall structures. Organizational Flexibility Organizations with fewer levels between managers and employees can more easily implement strategic management plans, take action steps for short-term goals and take action on policy and procedural changes. By acting on a level closer to front-line employees, managers can monitor progress toward goals and objectives as well as receive more immediate feedback regarding the feasibility of a specific action plan. Organizational Response Flat management structures allow lower-level managers more latitude to make strategic decisions, implement action plans and communicate these changes to front-line employees. This empowerment can decrease the time it takes to react to new opportunities or business threats. Share Organizational Goals Flat organisational structures include lower-level managers in the goal-setting process and empower them to help the company reach those goals. This shared process can foster community and create shared organisational goals. Decision Making The level of flexibility means decisions are made on an as needed basis, which makes it easier to serve the clients. In a tall organisation, a staff member needs approval from a supervisor who needs approval from a manager, and so on, before a decision is made. In a flat organisation, staff members have more power and can make some decisions immediately. Performance, Production and Profitability The flat structure revolves around qualified and competent staff. Fully engaged, skilled work groups leads to happier workers and high turnover. When employees are more responsible for operations, they take more pride in the company's success. In addition to increased productivity, organisations using a flat structure can experience leaner budgets by eliminating costly middlemanagement salaries. This can lead to a decrease in employee expense and an increase in profits.

Challenges of Flat Organizational Structure

Motivational Leadership An advantage of a flat organisational structure is that it places more responsibility on individual employees to motivate themselves and maximize their performance. This creates challenges at the same time, however, because employees have fewer leaders to motivate them and give them

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Flat Organisations

individual attention. Not every personality type thrives in a self-starting environment; some employees need managers for guidance, instruction and motivation. The challenge in flat organisations is to create a company culture that encourages self-motivation and breaking personal performance records. Consistency Organizations with less of an emphasis on supervision can be lacking in strict operational policies, creating a situation in which different employees handle different situations in different ways. 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 sell products that are inferior in some way, while others throw away damaged goods, creating discrepancies in product quality and company costs. Decision-Making Strategic decision-making in flat organisations can become complicated and inefficient if a company relies on voting or building consensus among its employees. Companies with flat structures who find themselves facing a decision with far-reaching consequences may find it challenging to address the issue quickly and decisively. Advancement Employee development programs take on new challenges in flat organisational structures. With a higher ratio of front-line employees to managers, there are fewer managers to take note of the individual performance levels of employees. This can make it easier for high-performers to fall through the cracks in performance reviews, possibly causing them to leave the company to find a position with more personal recognition. In addition to this, there are fewer managerial positions in which to promote front-line employees, reducing the advancement opportunities presented to each employee.

Advantages of Flat Organisation Structure

Benefits 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. Subordinates are free from close and strict supervision and control.

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Flat Organisations

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 Structure Limitations 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 relations may 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.

Considerations
Flat organisation structures work best with smaller companies, where it's possible to decentralize some decision-making while maintaining corporate integrity. Large companies spread out across multiple states may have a more difficult time using a flat structure, because it can result in upper managers having a loss of control of the functions of the business. Large companies can use a flat organisation structure by setting up each division with a flat organisational structure while maintaining corporate controls and final approval on decisions at the executive level.

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