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 whether a company will choose to be a tall vs flat organization. The size of the company is one key measure, with many larger companies opting for the tall structure. Small businesses often have little choice but to operate with a flat structure. Employee skills are another internal factor that may weigh in – after all, highly skilled employees can often manage their goals and deadlines better than entry-level, unskilled workers.
Additionally, external factors, such as an economic downturn, often result in fewer employees and more of a flat structure. Improved technology sometimes means companies don't need as many middle managers, which results in companies removing layers from the tall structure hierarchy. Other factors include the leadership style of the owners and top management and business objectives.
Tall Organization Structures
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 is a very tall organization. In tall structures, several layers of management come between front-line employees and upper management. Since tall organizations generally have fewer employees reporting to each manager, the managers can provide greater supervision.
Flat Organization Structures
In comparison to a tall organizational structure, a flat organisation structure has 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. That is why many tech companies and other newer businesses hoping to encourage innovation often prefer flat organization structures.
Tesla is one example of a major company that chooses to practice flat leadership. CEO Elon Musk has stated of the company's communication policy, "Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company."
Pros and Cons of Each Structure
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. Tall structures are particularly beneficial for new or unskilled employees who can use guidance and direction to help them complete their tasks. This is why most factories and other firms using low-skilled workers prefer a tall management structure.