Differences Between Horizontal & Vertical Organizations

Organizational structure within an organization clarifies employee roles, facilitates communication and establishes a chain of responsibility to help determine strengths and weaknesses. Before you determine whether your organizational structure should be vertical or horizontal, you need to understand the differences between the two frameworks. Implementing the correct organizational structure is critical to maximizing staff productivity Definition

A vertical organization is one that has a pyramid-look when charted out on paper. usually with a CEO at the top or the company president , making decisions and then delegating authority to lower-level managers, and then each division is made up of a series of middle management and supervisors who are responsible for various departments. This is often referred to as a “tall” organization. A horizontal structure is one without middle management where employees are largely allowed to make their own day-to-day operational decisions. Large groups of employees report often to just one manager. It is also called a “flat” organization. Decision-Making

The vertical and horizontal structures have very different ways of making decisions. In a vertical organization, decisions come from management down through the hierarchy to employees. Employees are given a set of guidelines to follow and must work with the management hierarchy to make any changes to job duties. Horizontal organizations empower employees to make daily operational decisions and encourage employees to consult with management on larger issues. The staff is driven by production goals set by the company, and there are company policies that must be adhered to for safety and legal reasons. Collaboration

A vertical organization tends to be structured in terms of employee and management collaboration. Since decisions must travel up and down the organizational chart, collaboration between employees and managers on company processes or issues happens in a very structured setting that includes meetings and constant monitoring. Because employees in a horizontal organization are empowered to make their own decisions, collaboration tends to happen more organically. Employees have open contact with each other and are more available to create collaborative solutions. Communication

The rigid structure of a vertical organization tends to slow communication between departments and from management to employees. Communication in a horizontal organization tends to be more organic and easily flows from one work group to the next. Benefits

Companies with a tall organizational structure are better at designating tasks to employees or departments within the company, have well-defined responsibilities for employees, and are generally easier to manage, according to Practical Management. Horizontally structured businesses tend to have the best employee morale because there is less red tape when dealing with problems. Also, it costs less to run a horizontal company because managers cost more than rank-and-file employees. Disadvantages

Vertical companies are dependent on a strong leader at the top. Weak upper management means that each successive hierarchical structure will get frustrated by poor decision making by the superior. In addition, tall companies lack the transparency of a horizontal company because each layer muddles information more and more. Horizontal companies are much harder to implement than vertical companies, especially as the business grows, because the business must foster a culture of teamwork. Employees may be less sure about their roles and responsibilities within the company, and project managers can be frustrated by their lack of authority. Potential

Frank Ostroff, author of “The Horizontal Organization,” believes that companies will become more horizontal than vertical as the world globalizes, because customers will demand fast response times and better service–two things at which horizontal companies excel. No business, however, should have a strictly horizontal or vertical structure, but rather should implement the best of both worlds. How Fortune 100 Companies are Flattening Hierarchies Through Enterprise Social

“With social computing, we’re looking to flatten our organization, make it less hierarchical and retain a 21st century workforce that expects these tools when they come into the office every day,” Robinson said.

Posted by tibbr admin on March 8th, at http://www.tibbr.com/blog/topics/enterprise-social-network-topics/why-are-leading-organizations-turning-to-a-flatter-organizationa-lhierarchy/?goback=.gde_3977473_member_99926731