Organizational levels of management are referred to as “tall and flat organizational structures” A tall organization, also known as a vertical organization, has the CEO at the top of the chain of command and other management levels below. A flat organization, also known as a horizontal organization, has fewer levels of management and gives employees more discretion in making decisions.
The decision of a company to operate as a tall or flat organization depends on a number of factors. One important factor is the size of the business, with many larger ones choosing the tall structure. Many times, small businesses have no choice but to operate in a flat structure. Another internal factor that could play a role is employee skill level. After all, highly skilled employees are frequently better at managing their goals and deadlines than entry-level, unskilled workers.
Additionally, external factors like a downturn in the economy can lead to a reduction in staff and a shift toward a flat organizational structure. When technology advances, businesses may find they don’t need as many middle managers, which causes them to remove layers from their tall structure hierarchy. Other elements include the owners’ leadership style, top management, and business goals.
In general, a company’s structure becomes more complex the bigger it is. For instance, the US military, with its extensive membership and lengthy chain of command, is a very tall organization. Front-line staff and upper management are separated from one another by a number of management levels in tall buildings. Tall organizations typically have fewer employees reporting to each manager, allowing the managers to exercise more control.
A flat organizational structure has fewer levels of management and, as a result, a shorter chain of command than a tall organizational structure. Flat organizational structures frequently give workers more power, autonomy, and responsibility. In a flat organization, workers are urged to collaborate to address business problems. Because of this, many tech companies and other emerging companies favor flat organizational structures in an effort to foster innovation.
One prominent business that opts to use flat leadership is Tesla. According to the company’s communication policy, according to CEO Elon Musk, “Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the entire company.” “.
Tall structure organization benefits
Some advantages of the tall organizational structure include:
Organized command
Within the command chain, a tall organizational structure has an advantage as a business format. From one person to the next, the command authority is both explicit and direct. For instance, a CEO can only direct those who are immediately beneath them in the hierarchy. They must do so through their managers or supervisors if they want to train lower-level employees. With this command structure, management and executives can consult before making decisions that could have an impact on employees.
Evident responsibility
Because tall organizations tend to have strict hierarchies, accountability for each class of employees is usually clear. Each employee in this structure supervises other employees and delegated specific tasks. Tall structures dont have fluctuating responsibilities or periodical responsibility changes. Employees may ultimately benefit from this because those who stay in their current positions may improve.
Clear promotion options
The tall organizational structure’s emphasis on a hierarchical structure may make promotion options seem more transparent to employees. Every employee is aware that they can advance to the next rank because each rank is directly above the one below it. Both managers and lower-level employees are aware of their potential for promotion to supervisory positions.
Greater supervision
Every manager or supervisor in a large organizational structure usually only supervises a small number of workers. They can keep an eye on their workers more closely to make sure training and daily tasks go as planned. This kind of structure may be very helpful for businesses that have quotas to meet in order to manage as many employees as possible.
What is a tall organization?
A tall organization is one in which the CEO or owner, who establishes objectives, company culture, and business strategies, is the most powerful member and where the leadership standards are vertical. Through managers and supervisors who carry out these procedures with employees, the CEO conveys these desires. This kind of structure is frequently used in large organizations with lots of employees, and it might be necessary to have a more rigid hierarchy to maintain workplace effectiveness. Team leaders and other employees have a lower rank in the hierarchy in tall organizations, where managers may oversee entire departments by themselves.
Important decisions may take longer to reach all organizational levels in a tall organization if there are too many managers in the system. Stress in the workplace can result from lower-level employees’ concerns not getting through to those making decisions. However, by strategically staffing their teams and using the right channels to address workplace needs, managers and leaders can prevent these situations. Other disadvantages of the tall organizational structure may include:
Tall vs. flat organization structure
Some differences between tall and flat organizational structures include:
Typical business type
When forming their businesses, small business owners typically employ a flat organizational structure. Flat organizational structures can aid a company in maintaining open lines of communication, maintaining a secure financial position, and adhering to particular standards like lenient management. Owners of large businesses usually use tall organizational structures. A tall organizational structure enables closer management and a strict compliance standard because they can use multiple employees for each step of the management process. A tall organizational structure may be necessary for larger companies with multiple departments to manage assets.
Difference in hierarchy
Compared to tall organizational structures, flat organizational structures have smaller hierarchical structures. Flat organizations have a smaller chain of command and less controlling authority because there are fewer managers helping to manage business affairs in them. They may have three levels of power at the most.
Tall organizational structures have more staff, responsibilities, and hierarchy structure. Within the structure, they may possess three or more levels of power, including supervisors, upper management, and employees.
Customer communication
Customer communication may be more frequent in flat organizational structures than in tall ones. Due to a more condensed hierarchical structure, flat organizations have more employees who interact with customers. Many managers and employees may interact with a customer and relay information to the CEO in a system with only managers, employees, and a CEO. However, a tall organizational structure may have less communication with customers because there are more employees in management roles.
Management strictness
Because a flat organizational structure employs fewer management personnel, it has less control over rules, regulations, and procedures. Additionally, due to the nature of the organization, businesses with flat organizational structures, like shops and restaurants, may have less strict management practices. Due to the large number of managers, supervisors, and employees required to establish a large organization, however, management strictness tends to be more pronounced in these organizations.
Tall and Flat Organizational Structure: Intro to Business
FAQ
What is a tall or flat organization?
A tall organization, also known as a vertical organization, has the CEO at the top of the chain of command and other management levels below. A flat organization, also known as a horizontal organization, has fewer levels of management and gives employees more discretion in making decisions.
What is an advantage of a tall organization?
A tall organizational structure’s main benefit is that it upholds a solid chain of command from the company’s executive level all the way down to the workforce.
What is an example of a tall organizational structure?
Businesses with complex organizational structures may set up their departments according to particular products. For instance, the corporate office of a department store might have vice presidents and managers for women’s clothing, sporting goods, and housewares.
Which company uses tall organizational structure?
Tesco has a tall structure. This is evident from the organization’s size and the hierarchy’s many levels.
