A blog by Yanis Varoufakis Why Valve? Firms as market-free zones The wheels of change: Spontaneous order via time allocation and team formation: What Valve signals for the future 1.
Posted by Satyendra on Dec 8, in Management 0 comments Comparison between Hierarchical and Flat Organization Structures Organizations can vary in the way they are organizationally structured. The structure of an organization is very important for achieving maximum productivity, managing individual work needs and reaching of corporate goal and objectives.
It determines the extent and nature of how leadership is disseminated within the organization. It is the method to ensure effective channels of communication. There are two types of organizational structures which are usually adapted by the organizations.
Organizations either have a hierarchical or flat structure. The type of structure chosen by an organization is determined by several factors.
It is characterized by a large number of layers between top management and the lower ranks of the organization. It has an organization structure that follows the layout of a pyramid.
In such organization, every employee in the organization, except one, usually the Chairman, MD or CEO, is subordinate to someone else within the organization. The layout has multiple entities that descend into the base of lower rank level employees, who occupy the bottom of the pyramid. Hierarchical structure is normally adopted by large organizations.
There may be only one layer or a few layers between the top of the management and the lower level employees. Flat structure is usually adopted by the smaller organizations.
A comparison of the two types of structures are shown in Fig. Fig 1 Comparison of tall vs. Therefore, organizations should be compared to other organizations of similar size and specialization to determine how much hierarchical or flat is their structure.
Thus for an example, the organization structure of an integrated steel plant can be compared with that of a steel foundry to determine how tall or flat the organizational structure is.
Hierarchical organizational structures are tiered arrangements that generally include many layers of management between top executives and employees.
Organizations with hierarchical structures have low manager-to-employee ratios. This allows managers to closely oversee and manage employee performance. Hierarchical structures within organizations also tend to encourage employees to fulfill overall corporate objectives over individual ones.
The following are the advantages of the hierarchical organization structure. Within the organization employees recognize defined levels of leadership along with their authority and levels of responsibility. Communication gets channeled along defined and predictable paths since employees know who reports to them and whom they are reporting.
A clear chain of command is available in the organization and this generates a clearly defined set of responsibilities. Opportunities for advancement in career are available that motivate employees to perform well. Hierarchical organizational structure promotes development of the employees as specialists.
It is possible for the employees to narrow their field of focus and become experts in specific functions. Employees become loyal to their departments and look out for the best interest of their area.
Hierarchical organizational structure has a number of disadvantages also. These are given below. Hierarchical organization structures work for standardized processes but they are not useful in dynamic environment.
They are slow to react to new opportunities which often need transformative changes.Comparison between Hierarchical and Flat Organization Structures. Organizations can vary in the way they are organizationally structured. The structure of an organization is very important for achieving maximum productivity, managing individual work needs and reaching of corporate goal and objectives.
Google’s organizational structure (corporate structure) and organizational culture (corporate culture) and their characteristics are analyzed in this online advertising, information technology, and consumer electronics business management case study.
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In a hierarchical organizational structure, your business has vertical levels leading to a top authority figure. Your employees are given clearly defined roles and leaders.
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Matrix Structure – In a matrix structure, people typically have two or more lines of report. For example, a matrix organization may combine both functional and divisional lines of responsibility.
For example, in this structure, a marketing manager may report both to the functional marketing director and the country director of the division he or .