Flat Company Structure

Introduction

Many companies have organised their employees into layers. Employees with the most authority (power) will be in the top layers and those with the least will be in the bottom layers. Companies will structure the layers in a number of different ways. This article is about flat Company Structure, to learn about other types of Company Structure, click on the links at the bottom of this page.

Layers and Span of Control

In contrast to a tall organisation, a flat Company Structure will have relatively few layers or just one layer of management. This means that the “Chain of Command” from top to bottom is short and the “span of control is wide”. Span of control refers to the number of employees that each manager is responsible for. If a manager has lots of employees reporting to them, their span of control is said to be wide. A manager with a small number of direct reports has a narrow span of control. Due to the small number of management layers, flat Company Structure are often small companies

Advantages and Disadvantages of Flat Company Structure

Advantages of Flat Company Structure	Disadvantages of Flat Company Structure
Greater communication between management and workers.	Employees may have more than one manager as there are a number of managers at the same level in the organisation
Better team sprit as fewer management layers increase interraction between employees on different levels (layers).	May hinder the growth of the organisation especially if managers have wide spans of control.
Less bureaucracy and easier decision making	Structure limited to small organisations such as partnerships, co-operatives and private limited companies.
Fewer management layers may reduce costs as managers cost more than non managers. Also employees at higher levels in the organisation expect to be paid more than those on lower levels.	Lack of layers may reduce opportunities for high level strategic management.

Conclusion

There are a number of different Company Structure each with their advantages and disadvantages. The most appropriate structure will depend on the size of the business and the type of business. Flat structures work well for small businesses or those with a small number of job roles. However a flat company structure needs to ensure that each manager's span of control does not become too wide so that they can not manage their direct reports effectively.