Agility! It’s the buzz-word of the moment as businesses and their management teams try to adapt to an ever-changing environment.
Customer and staff expectations, industry disrupters, technology and global political forces impact businesses of all sizes. Clearly, only the most agile will flourish. But how do you become agile?
Hierarchy vs Flat Organisational Structures
Management theory dictates that flatter management hierarchies generate more flexible, adaptable and agile businesses. However, this ignores the impact on employees. If you’re contemplating a change to your business’ organisational structure, you may wish to consider the following pros and cons.
Pros – Hierarchical Organisational Structures
Hierarchical organisational structures provide:
- Clear lines of communication. The direct manager assigns work and implements policy direction. There is also a clear process to follow if an issue needs to be escalated.
- A well-defined understanding of authority. The higher the position is, the more authority the incumbent has.
- An obvious pathway for career development. Climbing the corporate ladder comes with status, more authority, increased responsibility and greater earning capacity.
- A filtering process so senior managers only receive the information they need. This allows them to focus on what’s important from a planning and strategic perspective.
Cons – Hierarchical Organisational Structures
Of course, the major disadvantage of a hierarchical structure is that decision-makers are removed from front-end operations and customer interactions. It also means the larger the organisation, the bigger the bureaucracy. This, in turn, increases the possibility of bottlenecks occurring along both operational and decision-making lines.
As a result, decision making and response times are slower. It can also lead to a complete failure to anticipate when a change of direction is required.
Pros – Flat Organisational Structures
Flat organisational structures provide:
- A more collaborative workplace where each individual is recognised for the skills they have rather than their position within the organisation. The focus is on “the team” rather than individual performance or success.
- An opportunity for everyone to share their ideas on how to do things better and differently – especially from front-line staff. This freedom will often lead to innovative ideas that management would never have thought of.
- Less bureaucracy means all staff have the opportunity to speak directly with senior management about their challenges, ideas and solutions. As a result, managers are more aware of the needs of their staff and customers.
- The opportunity for different departments to work together for the greater good of the organisation and its customers.
- A vehicle for individuals to take ownership of their work and the outcomes it generates. When this occurs, staff have a vested interest in the success of their workplace which can lead to greater loyalty, engagement and fulfilment.
Con – Flat Organisational Structures
Nothing is perfect and flat organisational structures tend to suffer from:
- Ignorance about who to advise during a crisis or when an issue needs escalation
- A lack of clear pathways for career advancement
- An absence of recognised authority as there is no clear leader
- Indecision and slow decision making if collaboration and consensus are too highly prized
Considering A Change To Your Organisational Structure?
Management theory is just that. It cannot possibly understand the complexities of your team culture and the dynamics of your staff. But that doesn’t mean change can’t be implemented or even considered.
At End2End Business Solutions, our change management experts will help you implement your organisational restructure. We can also advise you on how to best utilise your current team to build performance and take advantage of the talent pool you currently have in your organisation.
Our help and advice is only a phone call away so call us now on 02 8977 4002.