Traditional organizational structures, often associated with top-down, highly procedural mechanistic organizations, drove much of the business landscape in the early and mid-20th century. Although traditional structures excel in industries where procedural uniformity equates to quality, they tend to have some drawbacks in meeting the varied demands of 21st-century businesses.

Low Creativity

Mechanistic organizations, the most common of the traditional structures according to the business website Reference for Business, feature strictly documented procedures, and managers in these organizations expect employees to follow approved processes without deviation. Although this structure worked well for the industrial sector prolific through much of the 20th century, it discourages employees from applying the type of creative problem solving required in the post-2000 business environment. In addition, traditional organizational structures left little room for exploration of employee ideas, a trademark of highly successful modern businesses like Google and Southwest Airlines.

Communication Problems

In a traditional organizational structure, employees work under several layers of management. Communication in these organizations originates at the top, typically with the organization's senior leaders, and flows downward through the company's various layers. Employees at or near the bottom of one chain of command typically experience difficulty communicating with peers in other work groups, as the organizational structure nearly prohibits the horizontal flow of communication. Similarly, employees in such organizations often lack the ability to communicate upward, and this restriction inhibits the receipt of employee feedback. In more modern organizational structures, by contrast, work groups commonly communicate with peers throughout the company, and many organizations encourage employees to express ideas or concerns with senior management.

High Cost

Traditional organizational structures typically feature several layers of management, and managers often command higher salaries than line-level employees. In addition, business writers at Family Business Experts point out that traditional organizations tend to expand the number of management layers as they grow, and expansion can considerably increase the organization’s costs. To control costs, modern organizations tend to use flatter, more horizontal organizational structures that reduce the number of managers and shift head count budgets to maximize the number of line-level employees.

Less Happiness

Traditional structures, and especially highly mechanized organizations, reduce opportunities for employees to express concerns, provide feedback and generally control their own work environment. According to Fred Luthans, author of the college textbook "Organizational Behavior," employees who lack the ability to control their working environment and have low levels of autonomy often experience less happiness in the workplace than their more empowered counterparts. Luthans also notes that employees in these environments tend to feel more stress, have a lower quality of work life and reach burnout more quickly than employees in more modern and less restrictive businesses.