Tall and flat organizational structures refer to the structures of an organization’s levels of management. A tall organization, or vertical organization, is one in which the CEO sits at the top of the chain of command, with various levels of management underneath. A flat organization, or horizontal organization, involves fewer levels of management and more employee autonomy in the decision-making process.
Factors Influencing Choice
Several factors determine the type of structure a company chooses. The size of the company is one key measure, with many larger companies opting for the tall structure. External factors, such as an economic downturn, often result in fewer employees and more of a flat structure. Improved technology means companies don't need as many middle managers, so that results in companies removing layers from the tall structure hierarchy. Other factors include employee skills, leadership style of the owners and top management and business objectives.
Generally, the larger the company, the more complex its structure, for example, the United States military, with its many members and long chain of command. In tall structures, several layers of management come between front-line employees and upper management. Since tall organizations generally have fewer employees reporting to managers, the managers can provide greater supervision.
In comparison to tall organizational structures, flat structures have fewer levels of management and therefore a short chain of command. Flat structures tend to empower the employees more and allow them a greater sense of responsibility and autonomy. Employees in a flat structure are encouraged to work together to solve company issues.
Pros and Cons
Both types of structures have pros and cons. In contrast to tall structures, in flat structures managers tend to have more employees reporting to them. As a result managers can't always provide extensive supervision, leading employees to come up with more solutions on their own. Thus, employees benefit from more freedom in a flat structure; however, they may get more confused as to what exactly their role in the company is. Larger companies, with their tall organizational structures, often provide employees with more direction, giving employees a greater sense of job security and understanding of what their roles are in the company.