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A flat organization (also known as horizontal organization or delayering) has an organizational structure with few or no levels of middle management between staff and executives. An organization's structure refers to the nature of the distribution of the units and positions within it, and to the nature of the relationships among those units and positions. Tall and flat organizations differ based on how many levels of management are present in the organization, and how much control managers are endowed with.

Organizational Structure

In flat organizations, the number of people directly supervised by each manager is large, and the number of persons in the chain of command above him is small. A manager in a flat organization possesses more responsibility than a manager in a tall organization because there is a greater number of individuals immediately below him who depend on him for direction, help, and support. Moreover, managers in a flat organization rely less on guidance from superiors because the number of superiors above the manager is limited.

Benefits of a Flat Organizational Structure

Empirical evidence from Ghiselli and Johnson suggests that the amount of independence managers in flat organizations possess as a result of the flat organizational structure satisfies many of their needs in terms of autonomy and self-realization. The idea behind flat organizations is that well-trained workers will be more productive when they are more directly involved in the decision making process, rather than closely supervised by many layers of management.

This structure is generally possible only in smaller organizations or individual units within larger organizations. When they reach a critical size, organizations can retain a streamlined structure but cannot keep a completely flat manager-to-staff relationship without impacting productivity. Certain financial responsibilities may also require a more conventional structure. Some theorize that flat organizations become more traditionally hierarchical when they begin to be geared towards productivity.

The flat organization model promotes employee involvement through a decentralized decision-making process. By elevating the level of responsibility of baseline employees and eliminating layers of middle management, comments and feedback reach all personnel involved in decisions more quickly. Expected response to customer feedback becomes more rapid.

Self-managing teams

The "strong form" of a flat organization is an organization with no middle managers at all. Very small businesses may lack middle managers because there are too few staff to justify hiring middle managers; in this type of organization, the business owner or the CEO may perform some of the functions performed by middle managers in larger organisations.

However, some organizations do not take on middle managers even as they become larger, and remain extremely flat.

An organization which has self-managing teams, that organize their own work without the need for a middle manager or supervisor above the team, may meet or closely approximate this model. This can cause conflicts with people whose career path expectations include a promotion, which may not be available within the organization due to its flat structure. However, alternative "horizontal" career paths may be available, such as developing greater expertise in a role or mastery of a craft, and/or receiving pay raises for loyalty.

An absence of middle managers does not preclude the adoption and retention of mandatory work procedures, including quality assurance procedures. However, due to the fact that significant responsibilities are given to the team members themselves, if a team collectively arrives at the view that the procedures it is following are outdated, or could be improved, it may be able to change them. Such changes may, in some cases, require the approval of executive management, and/or customers (consider for example a digital agency producing bespoke websites for corporate clients). If executive management is not involved in the decision, or merely rubber-stamps it, this might be an example of consensus decision-making or workplace democracy at the level of a team - or group of teams, if multiple teams are involved in the decision.

The foremost example of a company with self-managing teams is Valve Corporation, which also has rotating, not permanent, team leaders - which Valve terms "group contributors", in recognition of the fact that contributing individually and leading at Valve form a spectrum, not a binary dichotomy. Generally the term of a group contributor at Valve is at most one project, after which time they (voluntarily) rotate back to being an individual contributor. Valve also allows team members to work on whatever they find interesting. This is known as open allocation, and means that employees can switch to another team at any time, no questions asked; all desks are on wheels to make this easy. However, because new ideas may require significant resources, someone with a new idea may need to persuade a number of their coworkers to join them in order to create a new team and reach the necessary "critical mass" for the new idea to come to fruition.

Valve's cofounder has admitted that it has issues with failing to catch bad decisions early on due to a lack of internal controls, due to its lack of managers. Prof. Cliff Oswick from Cass Business School, who has studied Valve and other examples of "non-leadership", believes that Valve works because it hires high-calibre people who are a good fit for the leaderless environment, and because it was founded as a flat organization from the outset, so that new hires always knew what they were getting into. However, he warns that the peer-review-based stack ranking system Valve uses for determining employee remuneration, might become problematic if in the future Valve becomes short of cash.

Other examples of companies with self-managing teams include:

• Qamcom Research and Technology, a Swedish specialist company with 60 employees active in the area of communication, radar and automotive systems (40% PhDs).
• 37Signals, which has rotating, not permanent, team leaders. Some other digital agencies also use rotating team leads.
• GitHub Inc., which, like Valve, uses open allocation. However, in response to criticism, GitHub introduced a layer of middle management in 2014.
• Treehouse, which also uses open allocation.
• Polish company SoftwareMill
• The Morning Star Company, which has no supervising managers.

Related business concepts

In technology, agile development involves teams self-managing to a large extent (though agile development is commonly still practised within a hierarchical organization, which means that certain types of decisions such as hiring, firing, and pay rises remain the prerogative of managers). In scrum, an agile methodology, team members assign work to be done among themselves, either by free choice or by consensus. The scrum master role in scrum is not a management role as such, but is a role that involves helping to remove obstacles to forward progress, and ensuring that the basic scrum framework is adhered to by all parties, inside and outside the team - both aspects of the role being more akin to facilitation than to top-down micromanagement. Agile methodologies such as scrum have also begun being used in non-technology companies and organizations.

Criticisms

Drawing on Jo Freeman's famous essay The Tyranny of Structurelessness, Klint Finley has argued that "bossless" companies like GitHub and Valve might suffer from problems related to the appropriate handling of grievances, the formation of informal cliques, the "soft power" of popular employees, unprofessional and sexist attitudes, and lack of workplace diversity. However, some of these topics are the responsibility of human-resources departments in larger organisations, so it is possible that an effective HR department could resolve these issues within a flat organization.

Suzanne Baker argues that new power dynamics can emerge that undermine the equality afforded by a non-hierarchical context. When an organization decides to no longer place value on a person's position, Baker suggests that new hierarchies based on personality type, skill set, and communication style can emerge. If these hierarchies don't get acknowledged, it is much more difficult to address the emergence of a new hierarchy because they remain implicit or undetected.

Mark Henricks, business journalist and critic of flat organization, explains that, "When you have too little hierarchy, decisions don't get made or are made wrongly by employees who lack experience, accountability, or motivation to do the work of the missing managers"

See also

• Co-operative, in which organizational ownership is highly decentralised. Some co-operatives are also flat organizations, but some are not.
• Holacracy
• Hierarchical organization - a highly hierarchical organization is the opposite of a flat organization.
• Open plan offices
• Sociocracy (Dynamic Governance)
• Workplace democracy
• Workers' self-management

External links

• Flatten the pyramid (about.com)

Category:Organizational structure Category:Types of organization Category:Management Category:Employment

Current Article Outline/Proposed Edits:

→Introduction
→Explains what a flat organization is → flat organization has few or no levels of middle management between staff and executives Idea is that well-trained workers will be more productive when they are more directly involved in the decision making process, rather than closely supervised by many layers of management.
→Several statements in the introduction require a citation.
→It can come off as quite a bit of information to begin with and people could easily get lost in it, so the information could be moved into a subtopic or slimed down.
→Self-managing teams: no middle managers; often seen in very small businesses

Examples of self-managing teams
-Zappos
-W. L. Gore & Associates, Inc( democratically electing their CEO) large manufacturing company with 10,000 + employees. All employees are called associates.
-Qamcom Research and Technology
-37Signals
-Valve Corporation
-GitHub Inc.
-Treehouse
-SoftwareMill → example should be eliminated
-The Morning Star Company
We will do a case study of GitHub Inc. and Valve - they’ll have their own section under the heading of “successful examples of self-managing teams.” The rest will be listed briefly at the start of the section rather than given their own bullet point. Putting allocation in two other examples does not mean that people are going to immediately understand how that works within those companies. The size of the organization was an important factor when workers were asked about the about satisfaction. of tall vs.flat structure. Source: L. W., & Siegel, J. (1965). Relationships of tall and flat organization structures to the satisfactions of foreign managers. Personnel Psychology, 18(4), 379-392. Should add information that demonstrates the positive aspects of flat organizations to back up the case studies Sources: “Leadership and Managerial Success in Tall and Flat Organization” by Ghiselli and Siegel

Related business concepts → Section should be moved to the end
-“Scrum”: an agile methodology
-Agile development involves teams self-managing - team members assign work to be done among themselves, either by free choice or by consensus.
-Scrum master is not a management role
-Scrum master removes obstacles to forward progress, and ensures that the basic scrum framework is adhered to by all parties, inside and outside the team - both aspects of the role being more akin to facilitation than to top-down micromanagement.
The section should be able to be easier to relate to flat organization, give examples or in more detail explain the purpose of mentioning.

Criticism → Heading instead of subheading (DONE)
-Problems related to the handling of grievances -Formation of informal cliques
-“Soft-power” of popular employees
-Unprofessional/sexist attitudes
-Lack of workplace diversity
-Should include same amount of criticism as there is praise for organizational structure to keep the article balanced
Sources: Henricks, M. (2005). Falling Flat?. Entrepreneur, 33(1), 69-70.
-At the end of the criticism section there is a brief statement that reads: “In 2014, GitHub introduced a layer of middle management.[6]” and it is in the wrong place and should be removed from the end of the article. (DONE)
-Also in the criticism section, the statement, “ However, some of these topics are the responsibility of human-resources departments in larger organisations, so it is possible that an effective HR department could resolve these issues within a flat organization” should either be removed or backed up with citations.
This could also explain how other managements work better than flat organization, such a versus section.

See also:
-Co-operative, in which organizational ownership is highly decentralised. Some co-operatives are also flat organizations, but some are not. Holacracy
-Hierarchical organization - a highly hierarchical organization is the opposite of a flat organization.
-Open plan offices
-Sociocracy (Dynamic Governance)
-Workplace democracy
-Workers' self-management

References

Fried, Jason (April 2011). "Why I Run a Flat Company". Inc. (magazine). Retrieved 1 Sep 2013.

^ Jump up to:a b c "Why There Are No Bosses at Valve". BusinessWeek. 27 April 2012. Retrieved 1 September 2013. ^ Jump up to:a b c d Leo Kelion (23 September 2013). "Valve: How going boss-free empowered the games-maker". BBC News. Retrieved 1 October2013. Jump up^ "20 CEOs in one company". 31 July 2013. Retrieved 18 December 2013. Jump up^ Finley, Klint (20 March 2014). "Why Workers Can Suffer in Bossless Companies Like GitHub". Wired. Retrieved 13 July 2014. Jump up^ Evelyn, Rusli (17 July 2014). "Harassment claims make startup GitHub grow up". Wall Street Journal. Retrieved 18 July 2014. External Links Flatten the pyramid (about.com) Should add the following resources: http://smallbusiness.chron.com/advantages-flat-organizational-structure-3797.html http://www.forbes.com/sites/jacobmorgan/2015/07/13/the-5-types-of-organizational-structures-part-3-flat-organizations/ https://hbr.org/2013/11/hierarchy-is-overrated/

Info from annotated bibliographies

Mackenzie: An article that basically gives the example of Zappos and what that entails with working like a flat organization Also an article about the advantages of flat organization which can be good to help lift it up before the criticisms article.

Bernstein, Ethan. "Flat Organizations Like Zappos Need Pockets of Privacy." Harvard Business Review . N.p., 28 Nov. 2014. Web. 16 Oct. 2015. <https://hbr.org/2014/11/flat-organizations-like-zappos-need-pockets-of-privacy>.

<Ingram, D. (n.d.). The Advantages of Flat Organization . In Chron. Retrieved October 16, 2015. .http://smallbusiness.chron.com/advantages-flat-organizational-structure-3797.html>.

Holly:

Audrey:

Tyler: "At 37signals, however, we have a different position on ambition. We're not big fans of what I consider "vertical" ambition—that is, the usual career-path trajectory, in which a newbie moves up the ladder from associate to manager to vice president over a number of years of service. On the other hand, we revere "horizontal" ambition—in which employees who love what they do are encouraged to dig deeper, expand their knowledge, and become better at it. We always try to hire people who yearn to be master craftspeople, that is, designers who want to be great designers, not managers of designers; developers who want to master the art of programming, not management." - Jason Fried (co-founder and president of 37signals)

"First, this is hardly new. I’ve seen a few organizations with similar designs, just with different names, some dating back nearly 20 years. Second, it doesn’t always work out. In one example, the “circles” became groups that sought consensus without a mechanism to force consensus. As a result, there was essentially veto power for any 1 individual, because it prevented consensus. The organization wallowed in indecision, ultimately leading to crisis that lead to reverting back to a traditional organizational design." - Jamie Flinchbaugh (Lean Advisor)

Jeremy: