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What organizational structure does your company currently use? Hierarchical? Divisional? Matrix? Functional? Something else?
Companies often pivot to different organizational structures as they grow or as their needs change and you may be considering whether the organizational structure you currently use is really ideal.
This blog is here to give you a good idea about what a flatarchy is and how it works. Perhaps you will decide that it’s the right thing for your organization.
What is a flatarchy organizational structure?
Much the way it sounds, a flatarchy is a flat way of arranging a company, with few or no levels between employees. For example, there may be a CEO with employees working directly beneath him/her, or there may be just a team, with no hierarchy at all.
The term used for removing hierarchy from an organization to make it a flatarchy is ‘delayering’.
Usually, it’s the small companies that work best with flatarchies as there is no need for many layers of management and they benefit from the enhanced collaboration that a flatarchy affords. However, there are some very large companies, like Amazon and Hubspot that successfully use flatarchies too.
We’ll discuss this further below:
Which type of company is best suited to a flatarchy organizational structure?
Whether or not a company would do well with a flatarchy boils down to the size of the company, as well as the company’s goals.
Practically speaking, for startups and companies with few employees, it often doesn’t make sense to have more than one layer of management - there simply aren’t enough employees to go around. There’s also often no need for more than one layer of command in a small company, as the top management can easily manage the few employees underneath them on their own.
Having spoken about small companies, there are times when larger companies can do well with a flatarchy. Mammoths like Amazon and Hubspot need to adapt quickly to fast-changing technology and trends. Therefore, communication and decision-making need to be super sharp, and having multiple layers of management can impede fast communication and decision-making.
However, as we’ll detail in the disadvantages section below, for companies that don’t meet the above specifications, a flatarchy will often not be conducive to success.
What are some flatarchy organizational structure advantages and disadvantages?
- Better collaboration: Who are people more comfortable collaborating with, their managers or their colleagues? Their colleagues! So when there are more colleagues and fewer managers, as afforded by a flatarchy, collaboration is very smooth.
- Enhanced communication: Similar to the above point, a flatarchy can greatly improve communication. This is because there are fewer layers of management for messages to go through, so less chance of distortion and faster response time.
- Fast decision-making: When a company has team members, supervisors, managers, and a CEO, decisions can take a long time to be made. An employee can put forth a suggestion and that suggestion may have to be processed through all layers of management before a decision is made. Also, since there are so many layers of management that could be affected by a decision, it can take a long time for a conclusion to be reached. On the other hand, decisions in a flatarchy can be made very fast as decisions need to go through one layer of management at most.
- Promotes high morale: Everyone likes to feel in control and no one likes to feel like a puppet on a string, controlled by many managers. A flatarchy provides equality, with every employee being taken equally seriously and when employees feel that they make a difference to a company, their morale gets a big boost. High morale leads to more positive energy in the office, better work performance, and lower attrition rates.
- Saves money: In a flatarchy, there are fewer positions to hire for, so less is spent on hiring costs. Additionally, due to the removal of middle management, salaries are lower, and less needs to be spent on resources because there can be more people working around the same resources, rather than splitting resources up into managerial offices and employee offices.
- More innovation: Since there is less of a feeling of certain people being ‘in charge’ in a flatarchy, employees are more likely to be innovative, rather than just chugging along with the same old way the company has always worked. This is very useful in this day and age, when technology moves at such a rapid pace and what worked yesterday will not necessarily work today.
- Confusion: Possibly the biggest risk of a flatarchy is the confusion that can result from the equality it engenders. With less of a managerial presence, employees can get confused regarding who is responsible for what, as there may be one manager giving out tasks to many employees and it can become unclear which task is for whom.
- Stagnation: A company can find it difficult to grow when working with a flatarchy, as there is less of a spread of expertise, so a lower likelihood of the company being taken to the next level.
- Less opportunity for promotion: If everyone is working on the same level, or there is only one layer of management, there really isn’t anywhere to be promoted to, as there are few ranks to move through. This can encourage employees to move away from the company to somewhere where they can take their careers to the next level. There is also less motivation to produce good work if employees know that they are not going to be promoted.
- Power struggles: Even if a company officially works with a flatarchy, it’s almost inevitable that some level of power struggle will emerge at some point. It is human nature, after all, to want things to be done in one’s way and to want to take control. This risk can be addressed by empowering employees by giving them different minor things to be in charge of.
What is an example of a flatarchy organizational structure?
A fictitious company, called Logos by Design, consists of a CEO, an accountant, and three designers. Logos by Design uses a flatarchy, whereby all four team members work directly beneath the CEO. On a typical day, the CEO sends out a message on the company’s project management software, detailing the tasks for the day and when complete, the employees send the tasks directly back to the CEO to be reviewed.
How can you be more organized with Workamajig?
No matter what organizational structure you choose for your company, an organizational structure is only one aspect of having things, well, organized!
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