Flat Organisational Structure Case Study

Decent Essays
Introduction

This essay will discuss tall and flat organisational structures from a management perspective. The emphasis will be posed on the importance of hierarchy, different structural types, their benefits and drawbacks.

What is the organisational structure and why is it important

Organisational structure is a body of management, which defines how information flows from level to level within the company. The structure gives the employees a clear idea about who has the responsibility for what and how different roles relate to each other. It improves communication and increases productivity. According to Payne (2006), the organisation design and structure have a profound impact on the performance of firms. For this reason, every manager
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Despite of many advantages, matrix structure has been criticized for inability to identify who is in charge and for being expensive to maintain.
Flat organisation structure
Flat or horizontal structure is suitable for small businesses as it has only few or no management layers. The main purpose of this structure is to reduce the number of people in a management position and raise the amount of stuff in subordinate level.
Valve Corporation is one of many successful companies based on flat structure. This billion dollar video game developer has around 400 employees and 0 bosses. Everybody is equal. The aim is to work in a partnership and to give employees the ability to organise themselves around projects that need to get done, rather than relying on a hierarchy of managers. In order to work efficiently, the company only hires the people who have this idea in their minds.
Advantages of flat structure
Fewer hierarchy layers allow more flexibility within the workplace and employees can better adapt to a
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Disadvantages of Tall structure
One of the main disadvantages is communication. When the structure gets too tall, it takes a long time to respond because the information needs to travel through all levels. This can have a negative impact in decision making and progress of the company.
Cost is another disadvantage of the tall structure, as it creates many levels of management. Managers may become dominant and they also request high salaries.
Due to a narrow span of control, supervisions become stricter and the subordinates may feel they don`t have any freedom.
Conclusion
All organisations need to have some structure in order to work efficiently. Both structures have their advantages and disadvantages. If a company wants the employees to be flexible and cooperative with a strong voice in decision making, then flat structure seems to be ideal. There might be a need for companies to transform to tall structures, when they start growing larger. Tall structure can be good for big associations as it is more disciplined and helps to manage all divisions in the same pace. Final decisions should be made in accordance to the company`s size, goals and main

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