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New World of Work

Could Your Company Benefit from a Flat Organisational Structure?

Most companies work within a hierarchical organisational structure – it’s likely that right now, you are in a workplace that operates within a hierarchy. But as the way we work changes, so does the way businesses are structured. Times are changing and plenty of businesses are changing along with them.

There are plenty of big-name organisations who have tried and succeeded in implementing the ‘flat structure’. Valve Corp, Zappos and Gore-Tex are just a few of the companies who are opting to go boss-free. In particular, Valve Corp is project-focused – not giving individuals set job titles and choosing leaders according to the project with whole teams changing every time a project changes. These kinds of structures allow information to flow freely and lines of communication to open up, but there can be a downside.

Unfortunately, there are many, many more organisations out there who have tried the flat organisational structure and have found that it doesn’t work for them. The problem with the flat structure is that hierarchy is completely natural to all of us – even when the flat structure is enforced, it’s natural that those with seniority start to take positions that are respected highly.

So what’s the alternative?

‘Flatter’ structures give you a little of both worlds. They eliminate the traditional individualistic hierarchy and replace it with a hierarchy of teams – instead of removing all the layers in the structure, the ‘flatter’ structure simply has fewer layers, allowing everyone in the organisation to talk to each other more freely.

The important distinction between hierarchical structures and flatter structures is the role that managers play. In a hierarchy, managers typically have the power – they’re the first ones to get important information and they decide how it is distributed throughout the organisation. They are also generally supported by the employees that are under them. In a flatter structure, the managerial role changes so that the manager is supporting the employees, rather than the other way around.

What are the benefits of a ‘flatter’ structure?

  1. The playing ground becomes evened out, allowing all employees to interact and communicate with each other more freely and pass information between each other easily. In an interview with Raconteur, Jesper Dansholm believes that a “flatter organisational structure” creates “a high level of trust between owners and employees.” An organisation built on trust is bound for success.
  2. As mentioned earlier, information can flow more freely when the top bosses no longer hold the majority of the power. When information flows freely, all employees can feel empowered to do their jobs to the best of their ability and to make decisions confidently, knowing that they have all the information available.
  3. Flatter structures also have a huge emphasis on teamwork, lessening the stress and pressure that individuals are burdened by, instead placing the burden on a group of people.

No one organisational structure will be the perfect fit for every workplace and it’s important to choose wisely. However, a flatter structure that focuses on teams rather than exalting individuals might just be the way forward as we adjust to this new world of work.

Pendragon can help you run your business more efficiently, saving you time and money. 

For further information please don’t hesitate to contact us, book an appointment or reach us at [email protected] or 02 9407 8700 where one of our Australian team members will gladly help you.

Pendragon Team