Is yours a flat or a tall business?

There are a lot of decisions involved in starting and running a business, and one of the most important ones involves deciding how your business will run day-to-day. Your organisational structure will have a direct impact on how your business works and how your staff members operate.

Generally speaking, there are two overarching options when choosing a business structure: flat and tall. In order to make the right decision for your company, you’ll need to look deeper at your specific requirements and goals.

We’re going to help you make this crucial decision by outlining the pros and cons of each structure below. Let’s take a look.

Flat Organisational Structure

A flat organisational structure is the more democratic option, ensuring all employees have an equal say in company decisions. It doesn’t include a hierarchy, and is well suited to businesses looking to increase employee collaboration and communication, especially small businesses and start-ups.

The benefits of a flat organisational structure

Flat organisational structures include more people at the top of each level. This allows for more efficient decision making and communication, making sure everyone is responsible for their own results. It encourages direct communication among leaders, allowing for information to be shared more easily. Flat structures can also be good for team morale by helping everyone feel connected and valued.

Flat structures are adaptable to change, making them the more flexible option. All employees are equally responsible for their work, encouraging greater creativity and innovation. By maximising employee engagement, a flat structure can also lead to high performance working.

The downsides of a flat organisational structure

While great for creativity, flat structures are typically less, well, structured than tall ones. This can lead to confusion over roles as there is less hierarchy to dictate the running of things. It can result in a case of too much management for too few managers – sometimes leading to a bottleneck. This, in turn, can result in higher levels of stress among staff.

Tall Organisational Structure

A tall organisational structure is more centralised than a tall one, with decision making authority fixed at the top. Communication flows vertically through a hierarchy system, and information is shared on a need-to-know basis. This structure defines how tasks are assigned, how information is shared and how decisions are made.

The benefits of a tall organisational structure

A tall structure is designed to give managers maximum control over what happens in their organisation. Information flows up and down the hierarchy, and this allows decision makers at different levels to make decisions with clarity. In times of crisis, the smooth flow of information up and down the hierarchy allows for effective communication to resolve problems swiftly.

A tall structure can also allow for a greater sense of job growth, aspiration and opportunity, offering staff members more rungs to climb on the company ladder thanks to a transparent chain of command.

In a tall structure, there is a clear port of call for each specific problem. This can lead to cost savings through better crisis management.

The downsides of a tall organisational structure

Tall structures run the risk of becoming too tall, with too much emphasis on the top of the structure. This can lead to businesses becoming too bureaucratic, with too many levels of management that result in communication breakdowns and slow decisions. What’s more, those at the bottom of the hierarchy may feel disconnected from those at the top, and therefore undervalued.

Final thoughts

There is no right or wrong answer when it comes to choosing a structure for your business; it’s all about what best suits your specific requirements and ultimate goals. In many businesses, a mixture of tall and flat business structure factors are utilised in order to get the most benefits out of your organisational structures.

Got a business idea you’d like to get off the ground this year? We have helped thousands of businesses to grow, supported by the European Regional Development Fund (ERDF), so we’re here to support you.

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Get in touch with the team at TEDCO Business Support today. Give us a call on 0191 516 61 02 or drop us an email at hello@tedco.org.

 

What we offer

TEDCO offers one-on-one support provided by a dedicated team of business advisors and a range of pre start seminars available to clients who are taking the first steps into self-employment. This could be looking at an initial idea and developing it further, looking at how to start a business plan, business competitors, business marketing.

Are you eligible?

If you are looking to start and grow a business we’d love to hear from you. Our friendly team of experienced Business Advisors are on hand to take your call to discuss the support available.

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