It makes employee retention difficult. Often, an owner makes major business decisions, and a manager or managers underneath the owner supervise employees, who are all equal to one another. The advantage of this horizontal organizational structure is that it allows decisions to be made faster. These are just some of the advantages and disadvantages that you should know about the choosing to apply this kind of flat organizational structure. That lessens their effectiveness and ultimately is costly to the employer. The advantages of tall organizational structures are more opportunities for advancement and more specialized managers; the disadvantages are higher costs and reduced empowerment. This also slows down the decision making.
For leaders every aspect of the business and its design is a decision. The following are some of its disadvantages: Loss Of Control When the ratio of employees to managers become too out of whack, it is easy to lose control of a situation. The direct input that is taken from employees also leads to less behind the curtain operations and schemes to take place. Flat structures don't group according to function. This makes it difficult for some employees to focus and specialise at their jobs.
The flat organizational structure naturally increases the levels of independence that workers experience in their job every day. Another advantage is improved customer relations. Advantages of Hierarchical Structure â¢ Employees recognize defined levels of leadership within the organization; authority and levels of responsibility are obvious. In such structures there are relatively few levels of management, therefore, each leader is subordinated to a greater number of employees than the optimal number adopted for hierarchical structures. An employee may go to work for a flat organisation expecting to do one job, but find out that pieces of many other jobs are also required as needed.
Accessing a chain of command, having a place for everything and everything in its place, and knowing that one is not alone are advantages of organizing. This can greatly impact the respect and morale of a company on all levels of authority. The specific number will vary with the complexity of the business. When a company utilizes a flat organizational structure, there are fewer, if any, levels of middle management included within the chain of command. Flat organizational structures are designed to be organic, flexible and low pressure. The specific job function of employees may not be clear.
The structure is the significant component of the system, which varies from the structure by the existence of a target orientation, which gives the system the appropriate focus. Let us now take a look at its limitations. A flat panel monitor can be only several inches thick and weigh less than 5 pounds. Teams are cross-functional or process-oriented and may govern themselves. Less Hoops The fewer people that have to be consulted about a decision, the faster the decision can be made. In some cases, more than one manager or position may have a lopsided portion in its organizational structure.
The disadvantage of using the flat organizational structure is that it can create role confusion within highly structured teams. Naturally, a small level of authority figures in business would lead to more effective communication. Adaptability Employees and work groups in flat organizations tend to be more adaptable in changing or unique circumstances, due to their smaller hierarchies and lack of bureaucracy. Meanwhile, because management empowers employees, morale improves and workers become more committed and results-driven. Can Result to Role Confusion An employee may go to work for a flat organization expecting to fulfill a defined role, but find out later that he or she needs to do many pieces of other jobs. A perfectly flat organization runs the risk of not making enough decisions to operate the organization, which in turn limits the size the organization can grow to.
Organizational structure is a formal outline of the managerial reporting relationships inside a company. It shakes everything up and tends to put everyone off. These disadvantages may not always persist in an organization. The flat organization supervises employees less while promoting their increased involvement in the decision-making process. As they grow, however, they must prepare and educate themselves on the potential disadvantages of organizational structure. Although access is a benefit, because there are not continuous lines of communication between varying departments or teams, a lot of time can be wasted when trying to be innovative.
Disadvantages Tall organizational structures also offer disadvantages compared to other types of structures. For example, a company that has a strict, formal structure may be unable to move quickly to adjust product types based on consumer demand. It Makes Employee Retention Difficult Who does not want a promotion? The organizational structure specifies the method of organization of the communication line, policy, authority, and responsibility of the company. Because only a few people have to be consulted about a decision, the management can provide rapid response to any concern or issue. If that person leaves, the employees bicker amongst themselves about who should be in charge when a replacement is not named. This makes a flat organizational structure extremely beneficial. The system can pose a problem to the whole organization when the ratio of employees to managers become too out of proportion.
Knowing the potential disadvantages helps a company overcome these problems to improve its operations. Instead, employees belong to groups tasked with fulfilling some company objective. Fewer employees means less expenses for payroll and office space. They function with few rules, adjusting practices and even the jobs themselves according to the challenges the company must meet. This design eliminates waste, especially by doing away with unnecessary positions that might have existed in a functional design. The matrix organizational structure brings the employees and managers together to work on a specific goal which makes it atypical. Highly-skilled workers often struggled in structured hierarchy environments because their creativity is often limited.
This can be a disadvantage for important strategic decisions that will have a long term impact on the company, since they will tend to get relatively less time spent on determining the best strategic path. Organizational structures play a key role in effective communication and decision-making. This means employees need to be more self-motivated and independent in their work style, and less independent employees will not function as well in the environment. It can cause work relationships to struggle. Basically, this business model is most practical in small companies and in smaller departments of large organizations because the fewer number of management layers makes running a large corporation nearly impossible.