A Better Way to Organize Corporate Organization Structure

For as long as corporations have existed they have been organized in more or less hierarchical structure. Typically the line workers report to a supervisors, who reports to a manager, eventually leading all the way to the top executive running the company – CEO. This generally worked very well in the corporations that came out of industrial revolution.

With the rise of technology and start-ups this organization structure is being increasingly questioned. Many companies, such as Zappos, GitHub, and other start-ups are ditching this hierarchical organization structure in search of better way of working that will enable collaboration and innovation that is at the heart of these companies. Below we describe several options that have sprung up in recent times. Not all of them may be suitable everyone. You should consider the pros and cons of each and find the one that is most appropriate that will help you achieve your goal.

Flat Organization

This is a variant on the traditional hierarchical structure prevalent in most organizations. The goal is to remove the layers of hierarchy and make it more flat. This type of structure improves collaboration and communication since there are less number of layers through which information needs to flow through.

A flat organization requires all employees to commit to using technology for better communication. It requires an understanding that managers as well as employees be more open in communicating with one another. Companies like Cisco, Whirlpool, and many other traditional ones are increasingly moving to a flat organization.

Self-Managed Organization

A self-managed organization has no managers, job titles or seniority of any kind. All employees are considered equal. In self-managed organizations, employees work together to list projects that should be completed. If employees want to start a project, it’s up to them to find funding and build their team.

This type of organization structure is more suitable for start-ups with less number of employees. It is likely to create a chaos in larger organization.

Flatarchies

Flatarchies is a hybrid structure that combines the benefits of hierarchical structure with self-managed teams. When a special project is underway, employees can join the flat team where all members are equal. This allows companies to be nimble when they need to be, while keeping some kind of hierarchy.

Companies like Google, Adobe and LinkedIn are among many tech companies that have adopted this style of organization with internal innovation teams, where members work in a flat team to come up with new products or solutions.

Holacracy

The basic goal of a holacracy organization structure is to allow individual employees work on what they do best. Job titles become roles structured around work, and people can hold multiple roles. Decisions are made by the team focused on a particular project. Holacracy is somewhat similar to a flat organization with some structure inserted to provide better control for the management.

Holacracy became talk of the town when Zappos announced it would adopt the model. The jury is still out on whether holacracy can work for a larger company. For now, it’s safe to say that holacracy would be easier to implement among small and medium-sized companies.

About the Author

Touro University Worldwide offers fully online business programs at both the undergraduate and graduate level that examine relevant topics such as trends in management and organizational structure. From our online Bachelor of Science in Business Administration and Management to our online MBA, you can discover the degree program that will prepare you to reach your career goals.