What's the difference between a tall organisation and a flat organisation? The one-minute guide

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Is this ray wise to keep things flat?

Where there is a large number of levels in the management hierarchy, the organisation is said to be ‘tall’. This will tend to result in narrow spans of control. Where there is a small number of levels in the hierarchy, the organisation is said to be ‘flat’. Flat organisations will tend to have wide spans of control.

In tall organisations, managers have smaller spans of control (ie, fewer people reporting directly to them). This reduces the number of people they have to manage, but means it takes longer for information to travel through the layers of the organisation. In flat organisations, the opposite is true: communication can be quicker because of fewer layers, but the spans of control are larger. In recent years, tall organisations have tended to be associated with large bureaucracies. Communication will be formal and middle managers may be in a position to use information as a device to retain control. On the other hand, smaller spans of control may mean that managers have more time to manage. Furthermore, there are more explicit career paths, with opportunities for promotion.

Flat organisations developed because there is a belief that communication is impaired by additional levels of management. Flatter organisations are thought to be able to react to change more quickly. Managers may be forced to delegate if their span of control is enlarged. This can be motivating for those to whom work is delegated. On the other hand, career paths are less explicit: employees may have to look sideways or even outside the organisation for career development opportunities.

What is delayering?

In recent years, there has been a trend towards delayering, whereby tall organisations have tended to become flat organisations by the removal of various levels in the hierarchy. This has been facilitated by:

• Information technology, which has reduced the need for many middle management jobs, which were largely concerned with processing information to facilitate control within the organisational hierarchy.
• The management philosophy of empowerment, where people at lower levels have been delegated authority to take actions and make decisions which would previously have been the domain of middle managers

What are the advantages of delayering?

• A significant reduction in costs as middle managers’ salary costs are removed.
• Increased motivation as people at lower levels are given power/discretion to make decisions. Improved performance is likely to be a consequence of increased motivation
• Improved, faster communication between senior management and operational levels – increasingly important in a faster changing, more uncertain and increasingly competitive external environment.

What are the drawbacks of delayering?

• A possible loss of control.
• Middle managers are often necessary to translate the inevitably broad and general plans of senior management into operational plans and actions that can be implemented.
• Senior managers may have only a hazy understanding of what is going on at the operational level and much is thereby entrusted to relatively junior people