5 Challenges of Flat Organizations [And 5 Solutions to Flat Organizational Issues]


Part 1

What Is a Flat Organizational Structure?

A flat organizational structure is precisely what its name suggests. Leadership is decentralized, and there is no one person (or group of people) at the top. If a hierarchal organization could be represented as a mountain, a flat organizational structure is a flat plateau. There is no seniority or executives, and there might even be a lack of job titles. By design, there is no one to answer to, and employees can choose their projects. Some companies may have a loosely defined upper management, but there is likely no other level between this group and individual employees. Communication can flow a lot easier, and employees are encouraged to participate in the decision-making process. Flat organizations do serve a purpose, but they can be challenging to manage if an organization gets too large.

The Importance of Flat Organizations

As with any organizational structure, flat organizations can work in certain situations, and they complement specific leadership styles. Likely, laissez-faire and democratic leaders would thrive in a flat corporate environment. The structure may not work for everyone, but two essential elements drive home its importance. The lack of bureaucracy and the incorporation of employee decision-making. A heavily centralized structure can make innovation and creativity null and void in an organization. If employees always have to wade through various levels of leadership to get something done, then productivity can decline. Also, workers like to feel they have input in their work environment. Workers feel more engaged when they are invited to make decisions about the work they do. According to a 2013 workplace survey by Gensler, employees are more satisfied when they have a choice in when, where, and how they work. The level of autonomy that flat organizations can give employees is something companies should consider incorporating into their organization.

Part 2
5 Challenges of Flat Organizations

Flat organizations are a newer style for companies, and its appeal to self-motivated and talented workers can make it desirable. While these organizations do have a lot of positives, there are some challenges any company that utilizes this style has to be aware of.

  1. Difficulty in Transitioning to This Style

    — There is a lot that has to change for leaders looking to transition to this style. Leaders would have to eliminate layers of leadership, change roles, and hope that employees would buy into the changes.


    — If a company has a large number of middle managers, then this leadership style would require those positions to be done away with.

  2. A Lack of Role Clarity

    — Workers may enjoy the lack of red tape and a more relaxed way of communicating with upper management. However, employees may become frustrated at having poorly defined roles.


    — They may always seek information about their position and what their assigned activities are.


    — This can slow productivity and negatively impact performance.


    — This has the potential to get worse as time goes on and the organization grows.

  3. Cannot Facilitate Growth

    — For smaller organizations, a flat organizational structure can work. However, as they grow, this situation may not be feasible.


    — If the organization wants to go public, then a board of directors is required which adds another layer of decision-making.


    — A growing organization can also lead to a more complicated structure.

  4. Promotions Are Nonexistent

    — Since leadership is decentralized, and there is a lack of viable positions for workers to pursue, then it could lead to a decrease in motivation and morale.


    — Some employees like to feel they are working toward something, and that they have the opportunity to move up at some point.


    — A flat organization does not facilitate an environment where promotion is possible for employees.

  5. A More Detailed Hiring Process

    — A flat organization requires employees to be self-motivated, comfortable with a lack of direction, and ready to accept a lack of opportunities for immediate promotion.


    — Leaders would have to be clear about the type of worker they are looking for, and the expectations that will be required of them.


    — If they fail to communicate the unique nature of this organization style, then the person might be unproductive in this role.

Part 3
5 Solutions to Flat Organizational Issues

There are problems, but if leaders are committed to making this organizational style work, then it can end up being successful for the right company.

  1. Don’t Force It

    — While a flat organizational style may sound like a viable option, it may not be for everyone.

    — Leadership needs to survey all employees to see how they would feel about a shift to a decentralized leadership style.

    — Asking detailed questions about how they would react to various scenarios brought on by a flat leadership style will give leaders feedback on if this is a good idea.

    — If it is not, then leadership should not force the issue as it can have an adverse impact on leadership and employee relationships.

  2. Take the Benefits and Leave the Rest

    — A total shift to a flat organizational style may not be the answer.

    — Are there too many middle managers? Can there be a more natural way for employees to communicate with senior management? Can the organization increase employee input?

    — These are all benefits that flat organizations bring to companies, but if the structure does not work companies can create ways to realize the benefits without fully establishing the style.

  3. Set up Clear Lines of Communication

    — Communication is critical in any organization. While workers have fewer ladders to climb in reaching upper management, there should be clear lines of communication established.

    — Leaders would be accountable for helping employees develop times for meetings, having an open-door policy that allowed for questions and discussion, and creating opportunities for collaboration.

  4. Develop Teams

    — While leadership may be loosely defined, employees still need structure.

    — It would help for leaders to develop assigned work groups.

    — They can be determined by the projects they are working on, how their work intersects or any other reason that makes sense.

    — This will help employees feel that they have a defined group of people to work with and that they know what they are working on.

  5. Create Alternatives to Traditional Promotions

    — Instead of the conventional promotion, leaders may want to offer opportunities for more advanced professional development.

    — This could be taking on a new project, taking a class to develop a new skill or a monetary inventive for developing a successful new idea.

    — The purpose is to create ways workers can still learn new skills and try something new even if they are not able to take on a new formal position.

Part 4
Flat Organization Best Practices

  • Tie the Style to the Mission

    Does a flat structure benefit the vision of the company? Leaders can get even more buy-in if they tie the benefits and features of a flat organization to how the company operates. Innovation, creativity, respect, self-motivation, and other qualities are all concepts that leaders can tie into developing a decentralized leadership style.

  • A Robust Company Intranet

    Information is vital. Workers need to know what they need to do to get their job done. Posting job assignments, budget resources, and other important forms on the company intranet can save time and provide workers with the information they need to perform.

  • Assign Each Group a Decision-Steward

    It is great to make decisions by consensus, but there still needs to be one person who helps the group to reach a choice quickly. A “decision-steward” can be this person. They can organize the process to help the group achieve a goal a lot sooner.

  • Define Leadership by Ability Instead of Position

    Hierarchy is a word that scares a lot of people. Images of bosses looming over shoulders make a lot of workers feel uncomfortable. Flat organizations would do better to have people who are directly involved in a situation make leadership decisions. Those who have been with the organization longer and had more knowledge of a situation are in a better position to make a decision.

With the inclusion of remote workers, employees from various cultures, and younger individuals who do not favor a hierarchal organizational flow, flat organizations can benefit companies. However, leaders have to be prepared to address promotion, leadership, and communication issues before using this style.


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