Flat vs. tall organizational hierarchies

November 07, 2017

The pros & cons for students in EMBA programs

Visualization of a company's sturcture

Most people are familiar with the traditional style of business hierarchy. At the bottom, you have the specialists, people well-trained in completing a particular facet of the business's operations. A level higher, management figures who organize teams of those specialists and ensure their work is directed at particular goals. At the very top, the decision maker to whom all the lesser decision makers report, typically a lone figure.

It's a tried and tested structure, and one that has led to amazing results for many companies. Today, though, there's an alternative that has picked up steam, and that many forward-thinking professionals find quite compelling: a flat hierarchy, where many voices have equal weight and everyone answers to everyone.

Can a flat hierarchy perform to the same level as a traditional, so-called "tall" hierarchy, or is this just a pipe dream? Here's what students heading into MBA programs need to know.

Tall organizations can streamline production, but can be unfriendly to innovation

One of the great benefits of a tall organization is that there is a clear chain of command to adhere to throughout the decision-making process. A lower-ranked employee will answer to a manager, who might answer to a manager at a higher level, who will answer to lower-level executives, who will answer to the CEO or owner of the company.

This structure allows for quick, steady progress to be made, as it should always be pretty clear who has final say on a given decision. However, although this can lead to more rapid progress toward the completion of projects, it has been suggested that this type of system can also prevent employees from contributing their utmost.

Tall organizations tend to be based on a presumption that vision from the top will become the basis for directions issued to employees lower down. This can leave little room for innovative contribution from the average employee, which could be a loss for those businesses hoping to push the envelope.

Woman talking to a man
In tall businesses, employees may sometimes feel like they cannot contribute their ideas.

A hierarchical style of business organization is far and away the most common, so for many executives, the question becomes not whether to work with such a system, but how best to succeed in it. Enrolling in an EMBA program is an excellent way to get the grounding in leadership principles that can help you encourage the greatest level of participation and value creation by employees you oversee. With time, you may be able to encourage the environment of innovation that so many businesses crave.

Working with Flat Organizational Hierarchies After Your MBA Program

Flat organizations, unsurprisingly, behave quite oppositely to tall ones. They eschew the convention of rigid, multi-tiered hierarchy, instead placing just one or a few executives at the top and the rest of the employees in a common pool below.

This pool should function as a meritocracy wherein ideas and performance are rewarded, which can lead to exciting potential for innovation. Any employee with a great idea could, conceivably, become the start of something big and successful within the company.

Unfortunately, this looser structure does present obstacles. Though flat hierarchies can function quite well in small organizations, the model naturally begins to fall apart when the number of employees increases into the dozens or hundreds. Executives can't be expected to spend all their time directing each individual employee, making matters of project direction and resource distribution relatively difficult to resolve. Theoretically, after all, everyone has more or less equal say in those matters.

A team of four works on a problem
Flat organizations may experience difficulty functioning when they grow beyond a small team.

Unsurprisingly, purely flat hierarchies are quite rare in the business world, and even rarer among those businesses that have enjoyed enough success to expand, but they are not unheard of. If you currently work within a flat hierarchy, or are interested in the potential of flattening your workplace's hierarchy, consider reaching out to other members of your global executive MBA program class.

Drawn from many industries and regions around the world, they may have a unique perspective or personal experience to offer you about the long-term viability of the model, and guide you to make an optimal choice about organizing employees in the future.

Do you want to develop your business leadership and organization skills?

Contact WU Executive Academy to learn more about our world-class business executives university.

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