Advantages Of Vertical Structure

What are the advantages and disadvantages of a Horizontal organisational structure compared to a vertical structure, and which is more effective in the modern day business climate?

Company organisational structures can range from very vertical systems, which operate with a tall established hierarchy, to more horizontal layouts with fewer levels. Traditionally firms worked with a vertical structure in pursuit of becoming akin to an industrial machine (Weber, 1948). However, Swift evolution in Technologies, a change in the expectation of customers, the rise of globalisation and greater competition called for a shift in the prevalent structure. (D'Aveni, 1994). While the traditional system has benefits especially for larger companies, Flatter

Ostroff criticises the age-old vertical structure arguing that the format leads to autocratic top-down control and over specialisation of tasks. In his book, he claims that horizontal layouts have a plethora of benefits and ultimately, the use of vertical structures “has been rendered inadequate for today's demanding competitive, technological, and workforce environments”.

A key competent of a horizontal structure is that responsibility is divided up between equal level peers. (Ghiselli and Siegel, 1972) This reduces the need for mid-level management such as supervisors and while the chain of command is smaller, the span of control is greater. Therefore there are some profound advantages such as smoother

(Corkindale, 2011) Policy must be disseminated down from the top, through layers of supervisors. Similarly feedback must make its way up through bureaucratic hurdles to reach management. The chain of command causes the organisation to be less flexible – a vital requirement in the modern corporate world.

Being closer to management has both negative and positive effects on employee motivation. At first glance, a lack of promotion opportunities can demoralise the workforce. This is offset by the fact that workers in a flat structure have a personal interest in the outcome of a company and actually have the responsibility to influence it. In a vertical layout, while workers are inspired by promotion, they may feel that they have no bearing on the company and therefore do not share the aspirations and objectives that the firm has. This is especially obvious in the lower levels where employees have very little influence. (Ghiselli and Siegel, 1972)

In an ever more competitive climate, cutting costs is an important measure. Flattening the organisational structure can scientifically decrease expenses. The need to employ additional managers that require larger bonuses and a greater salary is not necessary after