Markus Reitzig is a professor at the University of Vienna working on Strategic Management. He has recently published a paper where he shares his thoughts on how organizations can become flatter while avoiding the risk of dysfunctionality.
Reitzig states that in flat organizations layers of management are deleted from the structure, giving more decision-making responsibilities to the remaining managers that should be able to delegate them to employees. According to the author, this situation can cause issues if the managers are not ready to delegate and/or if employees are not capable of assuming the new responsibilities. Thus, he proposes four questions that can guide a theoretical discussion to avoid such problems:
It is expected that when managers delegate, they will have more time to spend on core managerial tasks, which may be beneficial for the organization. The recent examples show that it is when mangers specifically choose the areas where they want to delegate, the higher are the chances of creating a successful flat organization.
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While increasing an employee’s autonomy is known to be beneficial, it also implies an increase of workload. Employees must carry additional decision-making power and are expected to continue performing the usual tasks of their role. Thus, it is important to understand the positive motivational mechanisms that autonomy triggers (self-actualization, perceived control, engagement, and reduction of fear) and foster them. At the same time, individual differences can play a significant role, as not all personalities would be motivated by, for instance, being in charge of their work life.
As mentioned previously, having a workforce with the right personality traits is important for the success of a flat structure, but it might not be enough. Having a leadership style that focuses on fostering empowerment would also be necessary. At the same time, making sure that the human resources are sufficient to fulfill the “ordinary” tasks, and having external coaching support would be key.
There are three corporate goals that are potentially better attained by flat organizations: creativity, speed to market, and attraction/retention of personnel.
First, at a certain level creativity benefits from diversity in the viewpoints which is possible when employees have more autonomy and are more engaged in decision-making. At the same time, having multiple stakeholders can slow down acting upon a creative output. For this reason, flat structures can be beneficial for a prototype development and can create problems when it comes to scale the business.
Secondly, and similar to creativity, the speed of the market can be increased with a flat structure when solutions are small and affordable. When the speed needs to be raised for the entire structure, multiple voices can obstruct it.
Finally, in order to attract and retain employees, mangers in flat structures can delegate the right decisions to foster autonomy. At the same time, leadership should always ensure that the design of the organization fits the autonomy provided to employees.