What Is a Horizontal Organizational Structure? 10 Facts

Occupational interactions are determined by organizational structures. The structure of a business determines who has authority, makes decisions, and is accountable. There are a variety of organizational structures available, and it is essential to choose the one that best meets the needs of your business.

This article explains what a horizontal organizational structure is, the differences between horizontal and vertical organizational structures, and how to choose between the two. 

What Is a Horizontal Organizational Structure?

In contrast to hierarchical or pyramidal structures, horizontal organizational structure is a method of managing employees in which decision-making is distributed along horizontal lines. The premise underlying this management style is that a collaborative approach boosts morale, productivity, and innovation.

It is a technique frequently employed by organizations with a strong emphasis on product development or fundamental business operations. Horizontal organizational structures are characterized by cross-functional work teams, in which employees with diverse areas of expertise collaborate on a single project.

What are the characteristics of a horizontal organizational structure?

Horizontal structures typically have two or three layers, while vertical structures have three or more. Typically, organizations are made up of only owners and managers, as is the case with small businesses. In some instances, directors, division heads, and managers may have management duties.

In general, the characteristics listed below characterize a horizontal organizational structure:

Chain of command

The horizontal structure is distinguished by a short chain of command. There may be two or three command structures in an organization. It could include upper management and lower management while eliminating middle management positions.

The span of control

Organizations have a wide range of control. Each management position is accountable for a substantial region or group. They supervised a large number of subordinates.

Autonomy

Managers permit subordinates to organize and manage their own regions. As a result, they have the freedom and independence to carry out their jobs and responsibilities.

Delegation

Executives encourage employee involvement in the decision-making process. Therefore, lower-level managers have the authority to make business decisions with minimal or no oversight from superiors.

Teamwork and collaboration

By reducing supervision, this structure may excite employees by encouraging productive interaction and collaboration. And collaborative work teams have evolved into an employee supervision mechanism.

Bureaucracy

The horizontal organizational structure is less bureaucratic and places less emphasis on strict adherence to rules and procedures.

What are the advantages of a horizontal organizational structure?

The organization’s horizontal structure results in cost savings. They are not required to hire middle management, a costly endeavor. As a result, they can reduce operational expenses. Among the additional advantages of a horizontal organizational structure are:

What Is a Horizontal Organizational Structure?

Utilize resources optimally

Organizational emphasis is placed on cross-functional structure. For example, employees can perform a variety of tasks based on business needs. It enables the organization to maximize resource utilization.

Better communication

Fewer communication layers result in improved communication. Additionally, information reaches its intended recipient more quickly and is less likely to be altered. More layers, however, increase the likelihood that information will be corrupted as it travels through the levels, thereby rendering the message ineffective.

Faster decisions

Fewer management levels expedite decision making and implementation. In addition, it allows the company to adapt to a dynamic business environment.

Empower employees

By granting them greater independence and freedom, management encourages employees to work freely and assume greater responsibilities. As a result, people enjoy having more control over their jobs.

High job satisfaction

Employees who have autonomy over their work may be more motivated. It improves job satisfaction and motivation.

Innovation

Employees can cultivate and express their creativity at work when granted autonomy. And they are capable of reaching their full potential. All of these factors result in increased creativity within the organization.

What are the disadvantages of a horizontal organizational structure?

Large companies with horizontal structures have less success. Formal structures are required for complex activities that involve a large number of personnel. Companies must divide tasks and responsibilities precisely and distribute them across numerous managerial levels.

What Is a Horizontal Organizational Structure?

Otherwise, internal inconsistencies may cause operational chaos. Due to their lack of organizational structure, they are unable to expand. Additionally, a horizontal organizational structure has the following disadvantages:

Fewer promotion opportunities

Companies have fewer management positions to fill. Employees consequently feel unable to advance their careers. They ultimately choose to seek employment with a different company.

Higher workload

Managers must supervise more subordinates, which increases their workload. On the other hand, assigning additional tasks to employees increases their workload. Consequently, it generates tension among employees and overwhelms management.

Confusion

The organization lacks defined roles and responsibilities. These generalizations are perilous. For example, workers are uncertain as to whom they should report to.

Power struggle

In the absence of clearly defined roles and responsibilities, power struggles are possible. Some people desire to exert a strong influence over others through dominance. Moreover, if departments’ tasks are intertwined and at the same level, the horizontal organization can lead to departmental conflict.

Lack of specialization

The company does not specify certain job duties in detail. Some personnel may hold multiple positions or be assigned to multiple areas at once. In addition to increasing their workload, this may also reduce their productivity.

Tips for choosing between vertical vs. horizontal organizational structure

Here are some tips to help you decide between a vertical and horizontal organizational structure:

1. Review your company’s strategy

Consider your company’s strategy. The strategy, objectives, and goals of your organization are frequently the most important factor in determining the optimal organizational structure. Consider what your company does, the industry it operates in, and what is required to ensure its competitiveness.

2. Consider the size and age of your organization

Consider the company’s age and size. Vertical organizational systems may provide larger businesses with the structure they require. Vertical organizational structures may also be advantageous for startups because they can help them navigate the path to success and are scalable.

3. Think about your clients

Consider which organizational structure would be most advantageous to your clients. Vertical organizational structures necessitate more stringent clearance procedures, which may make them more appropriate for businesses with niche clientele.

In contrast, horizontal organizational systems may have a more diverse workforce and provide employees with greater creative freedom. This may make certain organizational structures more suitable for businesses with a diverse customer base.

4. Think about growth opportunities

Consider the possibility of staff advancement. In contrast to vertical organizational structures, horizontal organizational structures may provide employees with more opportunities for advancement. Horizontal structures frequently provide all employees with equal opportunities for advancement and levels of responsibility, allowing them to acquire new skills.

5. Consider implementing a hybrid strategy

Consider developing a hybrid strategy that combines vertical and horizontal organizational structures. Consider, for example, a matrix-based organizational structure. The matrix organizational structure provides distinct departments with vertical structures associated with particular topics.

Nonetheless, the organization may assemble department heads to collaborate on new initiatives. Each employee is both vertically and horizontally accountable to their department and coworkers.

Where is the horizontal structure widely adopted?

This structure is frequently adopted by small businesses and new ventures. This is because their operation is relatively simple. Additionally, they have fewer employees, reducing the need for a management layer to supervise workers.

In other cases, the owner employs a supervisor to directly supervise the employee. They have a variety of responsibilities and report directly to the business owner.

What Is a Horizontal Organizational Structure?

However, as the business grows, so does the organization. As a result, the company’s operations are becoming more complex and more people are being hired.

And horizontal construction is frequently an undesirable option. It is deemed suboptimal because it frequently leads to confusion within the organization. For example, the organization does not outline specific tasks, positions, and responsibilities. Therefore, some individuals can play multiple roles. And it can cause complications in large organizations.

Large organizations, in contrast, will adopt a vertical structure. They dissect procedures and responsibilities into more specific components, resulting in specialization. In addition, they recruited additional supervisors of middle management. As a result, the organization of the company is better structured.

What is delayering?

Some organizations with a vertical organizational structure may decide to reorganize and remove one or more hierarchical levels. This is known as delaying.

Delaying attempts to increase productivity, reduce costs, and eliminate red tape. After delayering, the vertical structure becomes more horizontal. As a result, the organizational structure has fewer management levels.

Middle management is typically the intended audience. Since it has been eliminated, the corporation no longer spends money on intermediate management compensation.

In addition, communication and decision-making may be accelerated without their mediation. Additionally, administration can develop and implement decisions and policies more quickly. It allows businesses to be more responsive and flexible in a dynamic business environment.

What is horizontal organizational structure?

Horizontal organizational structure is a flat management structure. Typically, these organizations have a small number of managers and a large number of employees, and they permit employees to make decisions without management approval.

When employees are granted autonomy, they frequently feel more empowered and motivated, which strengthens their commitment to the company’s goals. Moreover, the relaxed nature of horizontal organizational systems frequently promotes spontaneous cooperation.

Differences between horizontal vs. vertical organizational structure

The following are distinctions between horizontal and vertical structure:

Who makes decisions

Each company has unique organizational structures and decision-makers. However, in vertical organizational systems, decision-making authority is typically reserved for the highest-level managers. Horizontal organizational systems, in contrast, frequently delegate decision-making authority to employees and may rarely require management approval.

Number of managers

Different organizational structures may employ personnel of various types and ranks. Vertical structures frequently have multiple administrators. There are both middle- and upper-level managers in these structures. In horizontal structures, there are typically few supervisors and a large number of independent employees.

Level of employee input

Different organizational structures allow for varying degrees of employee input. Horizontal organizational models enable employees to share their ideas and propose process enhancements. Some companies permit employees to make changes without manager approval.

Nevertheless, vertical organizational systems rarely solicit employee input, expecting employees to obey superiors’ commands without objection.

What Is a Horizontal Organizational Structure?

Flow of communication

Communication in vertical structures is frequently delayed and restricted to department heads and superiors. The layers of middle management may impede communication or result in misunderstandings, thereby delaying the development of a project.

In horizontal organizational structures, where employees can freely converse with one another, communication is typically more fluid. This may contribute to increased efficiency and productivity.

Level of efficiency

In vertical organizational hierarchies, approval procedures are frequently convoluted and inefficient. Typically, employees must obtain the approval of their immediate supervisors before obtaining the approval of their superiors. Nevertheless, horizontal organizational models frequently grant employees autonomy.

Companies employing these organizational structures are typically more efficient due to the lack of or absence of approval procedures.

Level of creativity

Typically, horizontal organizations provide greater autonomy to their employees. They might be inventive and innovative. Vertical organizations, on the other hand, provide employees with minimal autonomy and emphasize stringent processes.

However, many businesses now adopt a waterfall strategy within vertical organizations, encouraging individuals to be innovative and creative in their respective fields.

Amount of collaboration

Collaboration exists in varying degrees and varieties across diverse organizational structures. Horizontal organizational models typically foster and facilitate cooperation. These arrangements permit individuals to engage in cross-divisional experimentation and collaboration.

Vertical organizational systems, on the other hand, frequently involve only formal cooperation or meetings, and individuals frequently collaborate only within their own department.

Willingness to take risks

Typically, horizontal structures are more willing to take risks than their vertical counterparts. Vertical organizational structures may be more risk-averse as a result of department heads or managers who adopt defensive stances to avoid the possibility of failure.

In contrast, horizontal arrangements inspire inventiveness and alternative approaches. Rather than focusing on the potential failures, these systems may consider the potential benefits of the risks.

Job satisfaction

Horizontal organizational structures frequently enable and encourage innovation through experimentation. This frequently increases employee engagement, leading to high levels of job satisfaction. Those who enjoy rules and procedures may opt for vertical organizational structures.

Amount of structure

Vertical organizational structures are typically more structured than horizontal organizational systems. Each person in a vertical structure has a clearly defined role with specific responsibilities, limiting employee autonomy.

Horizontal structures offer less structure and frequently provide all employees with equal opportunities. However, this may result in a lack of direction or internal strife.

The Difference Between Vertical and Horizontal Project Management

There are numerous business structures and models in use. Physical structures are typically static, whereas organizational structures are dynamic. It describes how actions are directed to achieve the business objectives of an organization. Activities may include rules, roles, and responsibilities. In addition, the structure defines the process and flow of information from level to level.

What Is a Horizontal Organizational Structure?

The majority of companies are either vertically or horizontally organized. A vertical or centralized company organization, for instance, makes decisions from the top down. Multiple levels make decisions within horizontal or decentralized structures. The type of structure also affects how a business handles projects and achieves its objectives.

Vertical Organizations

Traditional businesses are frequently hierarchical, vertical organizations with a well-defined structure of executive leadership. Their influence extends to the department and middle management levels. In turn, intermediate managers delegate responsibilities to departmental employees.

When an employee completes a task, it is sent back up the organizational structure until it is accepted (or rejected) by management with the appropriate authority. The accepted work is then distributed to other organizational departments for additional testing or production.

Command and Control Project Management

Historically, vertical companies utilized a command-and-control model for project management. Similar to the corporate hierarchy, this approach to project management involves a senior-level expert who assigns responsibilities based on predetermined parameters.

The assigned employees must perform the task precisely as instructed, with little room for deviation. This is due to the fact that project managers are typically seasoned professionals with advanced degrees.

He or she is familiar with the daily responsibilities of employees and has already determined the most efficient way to complete the assignment. A second reason is to prevent scope expansion, which can result in project delays and/or budget overruns.

Drawback and Challenges of Vertical PM

As the global economy shifted from an industrial to a knowledge-based economy in the late 1900s and early 2000s, command-and-control project management began to lag behind the performance of startups.

Innovation vied with manufacturing capabilities as a crucial competitive advantage, allowing new entrants with flatter organizational structures to compete directly with established businesses with vertical structures. In response, vertical companies have developed and implemented a waterfall process in which work passes through numerous departments prior to completion.

Work is accomplished in a sequential manner, with tasks dependent on prerequisite requirements. There are more opportunities for deviation, but collaboration between workers of different categories is restricted.

Horizontal Organizations

Horizontal organizations prioritize skill competency over managerial hierarchy. There are fewer barriers between executives in leadership positions and staff. In smaller organizations, an industry-savvy CEO may work directly with the software development team.

When it comes to technical issues and concerns, however, he or she frequently defers to the most senior software engineer. In startups, project delivery trumps traditional management, resulting in horizontal structures.

Each member of the organization has the same level of authority and the same opportunity to provide input on project decisions. Productivity and goal achievement are of the utmost importance; consequently, creative problem-solving is encouraged.

Agile Project Management

A more agile approach to project management is more effective in horizontal organizations because their structure is flatter and more fluid. It enables iterative rather than sequential work completion. The project team executes numerous aspects of the undertaking.

In order to maintain the project’s relevance and clarity of needs, they test their product alongside end users and then collect consumer feedback. This method of project management employs iterative testing, which enables teams to continuously collect new data and make necessary improvements.

Agile project management works well with horizontal organizations because the completion of the project’s numerous components is not dependent on one another. Members of the team can also function in a cross-functional capacity, thereby increasing the team’s value.

Drawback and Challenges of Horizontal PM

Scalability is however problematic in both agile and horizontal organizational structures. Since everyone can contribute to a project, it becomes more difficult and time-consuming to make decisions as a team or company grows.

Scaling exacerbates any team-level dysfunction. Due to their complexity, a greater number of teams will have inter-team dependencies that are difficult to measure and visualize. Integration into the workplace becomes more difficult.

Conclusion

Horizontal organizational structure is a flat management structure. Typically, these organizations have a small number of managers and a large number of employees, and they permit employees to make decisions without management approval. When employees are granted autonomy, they frequently feel more empowered and motivated, which strengthens their commitment to the company’s goals.

An advertising agency tasked with creating a marketing campaign for a large corporation is an example of a horizontal organizational structure. The team would develop a central concept to anchor the advertising campaign in the customer’s mind.

One member of the team may concentrate on the text, while another concentrates on the visual appeal. A fourth individual may create the advertising campaign’s rollout schedule and coordinate its media debut.

Every team member would typically report to a team manager. A business may have multiple horizontal teams operating concurrently. In a small business, however, each team member can collaborate with management.

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