High Leveled Hierarchical Structure And Its Effect On A Company 's Performance

1369 Words Nov 12th, 2014 6 Pages
In the past, high-leveled hierarchical structure was popular for companies as it increased effectiveness when the economy was booming with mass production. (REF) Yet, it is defined as ‘rigid, tight’ and power is centralised in the hand of executives. (Ambrose and Schminke, 2003). However, nowadays, since trust is believed to be one of the main factors that boost the company’s performance (Kolajic and Rodojcic, 2011:28), organisations are flattening their structures (REF). ‘Trust’ has a broad meaning and there are many definitions for that but the definition that we are going to use as a moderator for this essay is that of Innocenti (2011), which is ‘the perception or belief by employees that their employers will act upon their words’. Ambrose defines the flatter structure and Schminke (2003) as a more flexible, open, decentralised system and the communication flow between workers and managers is broadened. Therefore, the number of levels of an organisation’s hierarchy seems to have a negative correlation with level of trust within the company. This essay will discuss whether this statement is accurate or not by giving evidence to support both sides based on 4 dimensions of trust and then conclude with the writer’s perspective.
First of all, it is essential to determine the components of trust within company to compare the relationship of 2 structures with organisational trust. Mishra (1996) believed that there are 4 dimensions of intra-organisational trust which are…

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