employee hierarchy

Do You Need Organizational Hierarchy in Today’s Business World?

Hierarchy emphasizes control-oriented leadership. But workplaces are changing and leaning towards a flat structure. So, here emerges the debate on which one is better. Do we need hierarchy in the workplace?

employee hierarchy

We come across many designations such as executive, team lead, manager, senior manager, and so on at workplaces. Each designation carries a set of job responsibilities. The organizational structure determines the hierarchy of the roles and how information flows between these roles. It has a tremendous impact on internal operations, communications, and operational efficiency.

So, what are the common organizational structures?

  • A hierarchical structure is found in most traditional companies where a pyramid-like structure is followed with rigid roles and authority. Corporate hierarchy is praised for its power to unify a company, sustain long term growth, and maintain business continuity during sudden disruptions.
  • A flat organizational structure is short and wide with no middle managers. It is a preferred choice in modern organizations where free-thinking and innovations are encouraged. Flat structure boosts employee motivation, supports rapid decision making, and lowers the overall costs. The influx of millennial in the workforce is creating a need for work environments that are open, transparent, and have minimal control-based management.

Which structure is beneficial to an organization?

Many organizations prefer the hierarchical structure for its ability to bring order and discipline along with the strict adherence to meeting deadlines. However, considering the exponential shift of organizations towards virtual workplaces, there is a need to rethink about the widely used hierarchical organizational structure.

The modern workplace is multi-generational and has been witnessing a growing millennial population. This requires a work culture that respects individuality, autonomous decision making, and experiential learning. The traditional concept of designations and hierarchy are becoming insignificant in this context and we need to transition towards a flat structure for innovative and lively work culture.

Here are the top reasons why we should shift towards a flat organizational structure.

  • Faster decision-making – Needless to say, a flat organizational structure allows faster workflow and requires only a few approvals. The response time is shorter and there is always direct communication within the entire organization. It allows employees independent decision making on many tasks.
  • Cost-efficient – A flat structure reduces the number of managerial staff. This results in reduced human resource expenses. There are lesser hiring and training needs and also lower salary expenses.
  • Improves employee motivation– Employee hierarchy creates micromanagement within the organization. This stifles the creativity of the employees and increases frustration. Many employees resent the need to take approval for minute tasks. Flat structure gives autonomous decision-making power to the employees and further increases accountability. The employees also feel motivated to perform better as they feel trusted and respected.
  • Transparent communication – Flat organization structure improves the communications among the departments and provides transparency in the workflow. The top management is easily accessible to the employees and this ensures that everyone gets an opportunity to be heard. It becomes easy to implement new organizational policies as the goals are communicated clearly across the organization.
  • Better customer relations – When hierarchy is reduced the customers can access the top management easily. Besides, employees feel more committed and responsible in a flat structure. This also increases their enthusiasm to provide better customer support and resolve their grievances faster.

Conclusion

Only a flat organization structure can promote flexibility, agility, and innovation at the workplace. It encourages employees to be proactive and participate in all activities. Even large organizations with multi-level structures can make efforts to flatten their organizational structure to reap the benefits of modern and progressive work culture.

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