Flat organisational structure

Flat organisational structure is an organisational model with relatively few or no levels of middle management between the executives and the frontline employees. Its goal is to have as little hierarchy as possible.

How does a flat organisational structure work?

In a small business with only a few employees, a flat or horizontal structure often makes sense. Staff usually report directly to the business owner, and there is often no formal management structure.

If there is a management layer, the chain of command is usually short. Each manager is responsible for a wide area or group. Employees report to one or a small number of managers and are encouraged to take part in decision-making. Managers can often make decisions without much involvement from senior leaders.

What are the advantages of a flat organisational structure?

While it will not suit all types of organisations, the benefits of a flat structure are:

• better communication and relationships between different roles
• better team spirit as there is less hierarchy
• simple, faster decision-making as the chain of command is shorter
• better ability for the business to change and adapt
• greater job satisfaction when employees are given more autonomy
• more self-direction can lead to more innovation and efficiencies
• ability to lower operational costs

A flat structure can work well for small and medium-sized organisations. It can also suit businesses that start small and keep this approach as they grow.
For larger organisations with hundreds or thousands of employees, a flat structure is usually less practical. These organisations often use a hierarchical organisational structure.

What are the disadvantages of a flat organisational structure?

Like any other organisational model, flat hierarchies have their downsides. The common disadvantages of a flat organisational structure are:

• risk of generalisation and confusion if it's not clear who to report to
• lower sense of accountability as employees may have more than one boss
• risk of power struggles arising in absence of a formal system
• lack of employee specialism and specific job functions
• lack of long-term growth or opportunity for promotion
• difficulties in scaling up and growing the company

If they want to flatten their organisational structure, hierarchical organisations will need to invest significant time, resources and investment to achieve this.

What does flattening an organisation mean?

Flattening an organisation, or changing a hierarchical structure to a flatter one, is called delayering. This usually involves:

• opening up lines of communication and collaboration
• removing one or more management layers 

Often, it is the middle management layer that is removed. Delayering does not always mean job cuts or lower costs, but it usually increases the number of people senior managers oversee.

Although it can be difficult and time-consuming, flattening can help improve efficiency, reduce wage costs and cut red tape. If you decide to change your organisational structure, it is important to manage the process well. See best practices in change management.