Copyright

What Is a Flat Structure in an Organization? - Definition, Advantages & Disadvantages Video

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Consumer-to-Consumer (C2C) e-Commerce: Definition, Business Model & Examples

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:01 Organizational Structure
  • 0:40 Advantages,…
  • 3:47 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Timeline
Autoplay
Autoplay
Speed Speed

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Carol Woods

Carol has taught college Finance, Accounting, Management and Business courses and has a MBA in Finance.

In this lesson, we'll define what organizational structure is, and explain some terms used to describe it. Then we'll cover the characteristics of the flat organizational structure, and discuss its advantages and disadvantages.

Organizational Structure

Structure in an organization refers to the reporting relationships between employees. These relationships can be shown in graphic form via an organizational chart, such as this one:

Organizational Chart
org chart example

The organizational chart displays the reporting relationships between different staff members.

In this chart, the span of control of the CEO is three - this is the number of people reporting directly to him. Also, this chart has three layers - this is the number of different positions in the reporting structure from the bottom row to the top position.

Advantages, Disadvantages and Impact

Flat organization structure refers to having a relatively small number of layers in your company's organizational chart. The specific number will vary with the complexity of the business. A very small company with a flat organizational structure may have all staffers reporting directly to the president, whereas a multinational corporation might have a large number of levels of management - but still be flatter than its peers.

In a flat organization structure, each manager has a relatively higher number of direct reports, as compared to similar companies. This can have advantages:

  • Fewer layers of management means fewer approvals in decision-making, which can mean faster decisions, and the organization can respond more quickly to new opportunities or threats.
  • Fewer layers of management also means that decisions reach the ultimate decision-maker sooner in the process, which gives the ability for faster decision-making, and therefore, a faster response to new business issues.
  • Fewer layers of management can lead to better and more frequent communication between higher-level managers and staffers, resulting in better understanding of company goals for the staffers and a better understanding of daily operational issues by the managers.

A flat organization structure also has some disadvantages:

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support