Flattening Organization Structures: The Good, The Bad, And The Ugly
November 16, 2022

The traditional hierarchical organization model is slowly but surely becoming a thing of the past. In its place is a new way of organizing businesses that is known as the flattened organization.

This topics was raised by EGN Business Leader Network groups in Indonesia, Malaysia and Singapore.

So, what exactly is a flattened organization, and when and how should businesses make the switch? Let’s take a closer look.

What Is A Flattened Organisation?

A flattened organization is one that has fewer layers of management than a traditional hierarchical organization. This essentially means that there are fewer middle managers, and decision-making authority is more evenly distributed throughout the organization.

In a traditional organization, there may be several layers of management, from CEO or President to Vice President, middle management, and staff, each with their own area of responsibility.

In a flatter organization, there are fewer management layers, and employees have more direct access to senior leaders. This type of structure is often seen as more efficient and better able to make decisions quickly.

There are several reasons why businesses might choose to flatten their structures, but there are also some potential drawbacks to this type of organizational setup.

Let’s take a look at the pros and cons of flattening organization structures.

The good: 

One of the main advantages of flattening organization structures is that it can lead to increased transparency and communication within the company. With fewer management layers, there is less chance for miscommunication or for important information to get lost in translation. This can help to create a more collaborative and open work environment and, at the same time, can lead to faster decision-making as well, as employees at all levels have direct access to the decision-makers.

Another advantage of a flatter organization is that it can promote creativity and innovation. With fewer layers of management, there is less bureaucracy and red tape. This can allow employees to be more creative and take more risks, leading to new and innovative ideas.

Finally, a flatter organization can also lead to increased job satisfaction and motivation. Employees often feel more empowered when they have direct access to senior leaders, and they feel like their voices are being heard. This can lead to increased job satisfaction and motivation as employees feel like they are able to make a real difference in the company.

The bad: 

There are also some disadvantages of a flatter organizational structure. One disadvantage is that it can lead to confusion about roles and responsibilities. With fewer management layers, there may be less clarity about who is responsible for what tasks. This can lead to frustration among employees if they feel like they are constantly being asked to do things outside of their scope of work.

Another disadvantage is that a flatter organization can be less stable during times of change or crisis. With fewer management layers, there is less flexibility when it comes to making changes or responding to unexpected events. This can lead to increased stress levels for employees who may feel like they constantly have to adapt to new situations.

Finally, a flatter organization can also make it more difficult for employees to see how they can progress in the organization. Without hierarchical pay grades and clear promotion pathways, it can be hard for workers to understand what they need to do to move up within the company. As a result, they may start looking for opportunities elsewhere.

The ugly: 

While flattened organization structures can have some advantages, they also have the potential to create new problems for businesses. For example, flattened organizations often have difficulty scaling up because they lack the necessary management infrastructure.

Additionally, flattened organizations can be more vulnerable to economic downturns because they typically have fewer resources available to weather tough times. When And How To Make The Switch

If you’re thinking about flattening your organization, there are a few things you need to keep in mind.

  • First, you need to make sure that your business is ready for such a change. This means having a clear understanding of your business goals and objectives and being confident that a flattened structure will help you to achieve those goals.
  • Second, you need to have buy-in from all levels of the organization, from senior leadership all the way down to front-line employees.
  • Third, you need to take things slowly and make sure that you’re implementing the changes in a way that makes sense for your business.
  • And finally, you need to be prepared for some bumps along the way and have a plan for how you’ll address them when they occur.

Conclusion

A flatter organizational structure has both advantages and disadvantages. When deciding if this type of structure is right for your business, you will need to weigh the pros and cons carefully before making a decision.

If you do decide to implement a flatter structure, it is important to ensure that roles and responsibilities are clearly defined from the outset so that everyone knows what their role is within the company. Communication should also be emphasized so that everyone is on the same page and decisions can be made quickly and efficiently.

However, if done correctly, flattening organizational structures can lead to increased transparency, communication, creativity, and innovation within the company.

As business leaders, we are constantly faced with new challenges and opportunities. To ensure we have the resources and support we need to succeed, it is essential that we build strong networks of like-minded individuals.

By joining a peer group or networking group, we can tap into the collective knowledge and experience of other business leaders. This can help us to resolve problems more quickly and make better decisions.

In addition, by sharing our own experiences and expertise with others, we can help to create a more supportive and collaborative business community.

At EGN, when we work together, there is no limit to what we can achieve.

Please get in touch with us if you’d like to join one of our groups. We would love to welcome you into our community.

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