The primary advantages of a flat organizational structure in business include direct involvement of workers in the decision-making process, better communication flow, faster response times to business challenges, and an open, collaborative environment that promotes idea generation and innovation. A flat organizational structure is characterized by few or no levels of middle management between workers and a company's top executive according to Forbes.
Mature businesses typically employ a hierarchical organizational structure that is shaped like a pyramid. Middle managers restrict access by low-level workers and customers to the top tiers of executives. By comparison, start-up businesses rarely have the resources to direct at hiring middle managers, resulting in a decentralized management structure where top executives and entry-level employees work side by side.
This type of flat structure is often a more organic management approach. With fewer barriers to upper management, communication between employees is streamlined, leading to faster adaptiveness when the business needs to capitalize on opportunities or respond to challenges. A horizontal structure promotes task independence with less focus on formal procedures.
It's not surprising that a flat organizational structure is popular with Internet-based companies and other businesses that have developed within a Web 2.0 social media paradigm. These new companies value collaborative work environments with open communication and investment by even the lowest-level workers in the company's social capital. These companies rely on ideas, innovation and employee engagement to keep up with a quickly changing business landscape, making a flat organizational structure the best suited to continued business success.