Horizontal or Flat Organizational Structures

Horizontal or Flat Organizational Structures

Flat organizational structure is an organizational model with relatively few or no levels of middle management between the executives and the frontline employees.  Its goal is to have as little hierarchy as possible between management and staff level employees. In a flat organizational structure, employees have increased involvement in the decision-making process.

Flat organizational structure is an organizational model with relatively few or no levels of middle management between the executives and the frontline employees.  Its goal is to have as little hierarchy as possible between management and staff level employees. In a flat organizational structure, employees have increased involvement in the decision-making process.

For a small business with a handful of employees, having a flat or horizontal structure is often the logical approach. The staff-level employees usually report directly to the business owner without a formal management structure. The span of control is wide with each management level controlling a broad area or group. Managers are given significant authority to make business decisions with little to no involvement from the top. In flat organizations, the number of people directly supervised by each manager is large, and the number of people in the chain of command above each person is small.

Main Features

  • Better communication and relationships between different roles
  • Simple, faster decision making as the chain of command is shorter
  • Better ability for the business to change and adapt
  • Lower operational costs
  • This structure does not support scaling up with growth

Related Links

Creation Date Thursday, 29 December 2022 Hits 2780

You May Also Like

  • GL - Recurring Journal Entries

    GL - Recurring Journal Entries

    A “Recurring Journal” is a journal that needs to be repeated and processed periodically.  Recurring Entries are business transactions that are repeated regularly, such as fixed rent or insurance to be paid every month. Learn the various methods that can be used to generate recurring journals. See some examples and explore the generic process to create recurring journals in any automated system.

  • Legal Structures for Multinational Companies

    Legal Structures for Multinational Companies

    A multinational company generally has offices and/or factories in different countries and a centralized head office where they coordinate global management. A multinational company (MNC)is a corporate organization that owns or controls the production of goods or services in at least one country other than its home country.

  • The Accounting Equation

    The Accounting Equation

    In this article we will help you understand the double-entry accounting system and state the accounting equation and define each element of the equation. Then we will describe and illustrate how business transactions can be recorded in terms of the resulting change in the elements of the accounting equation.

  • GL - Unearned / Deferred Revenue

    GL - Unearned / Deferred Revenue

    Unearned revenue is a liability to the entity until the revenue is earned. Learn the concept of unearned revenue, also known as deferred revenue. Gain an understanding of business scenarios in which organizations need to park their receipts as unearned. Look at some real-life examples and understand the accounting treatment for unearned revenue. Finally, look at how the concept is treated in the ERPs or automated systems.

  • Prepayments and Prepaid Expenses

    Prepayments and Prepaid Expenses

    Prepayments are the payment of a bill, operating expense, or non-operating expense that settle an account before it becomes due. Learn the concept of prepaid expenses. Understand the accounting treatment for prepaid expenses. Understand the concept by looking at some practical examples and finally learn the adjusting entry for these expenses. 

  • GL - Using Adjustment Period

    GL - Using Adjustment Period

    In most of the automated financial systems, you can define more than 12 accounting periods in a financial year.  This article will explain the concept of the adjustment period and the benefits of having adjustment periods. Adjustment periods have their inherent challenges for the users of financial statements and there is a workaround for those who don’t want to use adjustment periods.

  • Benefits of Automated GLs

    Benefits of Automated GLs

    The general ledger is the central repository of all accounting information in an automated accounting world. Summarized data from various sub-ledgers are posted to GL that eventually helps in the creation of financial reports. Read more to understand the role and benefits of an effective general ledger system in automated accounting systems and ERPs. 

  • The Accounting Process

    The Accounting Process

    In this article we will focus on and understand the accounting process which enables the accounting system to provide the necessary information to business stakeholders. We will deep dive into each of the steps of accounting and will understand how to identify accounting transactions and the process for recording accounting information and transactions.

  • GL - Intercompany Accounting

    GL - Intercompany Accounting

    After reading this article the learner should be able to understand the meaning of intercompany and different types of intercompany transactions that can occur. Understand why intercompany transactions are addressed when preparing consolidated financial statements, differentiate between upstream and downstream intercompany transactions, and understand the concept of intercompany reconciliations.

  • Introduction to Legal Entities Concept

    Introduction to Legal Entities Concept

    Modern business organizations operate globally and leverage a large number of registered legal entities, and operate through complex matrix relationships.  To stay competitive in the current global business environment, they must often develop highly diverse and complex organizational structures that cross international borders. Learn more about Legal Entities and their importance for businesses.

Explore Our Free Training Articles or
Sign Up to Start With Our eLearning Courses

Subscribe to Our Newsletter


© 2023 TechnoFunc, All Rights Reserved