Hierarchy Is Overrated
The flat organizational structure can work anywhere. This works best when:
The environment is changing rapidly. Firms organized around small, autonomous teams are much more nimble than large hierarchies. This makes it easier to respond to change.Your main point of differentiation is innovation. Firms organized with a flat structure tend to be much more innovative – if this is important strategically, then you should be flat.The organization has a shared purpose. This is what has carried Second Chance through their tough times – their shared commitment to the women they are helping. While the objectives may differ, all of the firms discussed here have a strong central purpose as well.
There is a growing body of evidence that shows that organizations with flat structures outperform those with more traditional hierarchies in most situations (see the work of Gary Hamel for a good summary of these results). But while we are seeing an increasing number of firms using flat structures, they are still relatively rare. Why is this so?
“It’s far better to rely upon a broad base of individuals and leaders who share a common set of values and feel personal ownership for the overall success of the organization. These responsible and empowered individuals will serve as much better watchdogs than any single, dominant leader or bureaucratic structure.”
See on blogs.hbr.org