Many of my students have been showing their concern on the new forms of organizational structures.  As we are living in the times of technology driven organizations that find place in most of the surveys and reports as most successful organizations in last two decades.  The nature of their organizational structure is very different.  Yet there are commonalities as well.  The core fundamentals remain the same though they operate much in an open system.  To the anxieties and interest of all my dear students of organizational behavior, strategy, structure, I wish to share my piece of thought and wish they are able to understand and relate theory with practice in a much better way.

Traditional management practices believed in bureaucratic structure and strong hierarchies. The worker followed the instructions and orders and the owner through managers got things done in the interest of the organization. Management scientists borrowed strategy from army establishment like many other practices. Strategies were required to win over the enemy. For organizations competition, both from beyond and within was the greatest enemy.

The hierarchal system was more dominated on the thinking of subordination and bossism. Organizations followed them and it resulted in improving effectiveness and great returns. Management started to believe in a preaching that – tighter the structure better the return. This was the time when workers were not that skilled and a culture of their exploitation was in practice. It was believed that the organizations are obliging the employees to have given them job. Employees were expected to perform as they agreed for a given monetary consideration.

This could not last long as it was not sustainable. Behavior scientists started approaching work from another dimension which was human concern and for a sizeable part of the twentieth century dominated this thinking whereby though hierarchies were drawn and structures were made keeping in mind the role of individuals and job requirement, however flow of information and feedback got imbibed in the structure in such a way that employees started feeling empowered as their voices were heard, they were consulted in decision making and they felt a sense of involvement in the process of the strategies drawn in the boardrooms.

Later part of twentieth century and the beginning of twenty first century marked team like structure where reporting became more informal and hierarchies got broken. Tall organizations started shifting towards flat structures. The process of reengineering and restructuring caught the eye of management strategists and top level decision makers. Western management thinkers started believing in William Ouchi’s Theory Z. Integration started happening on structures and innovative ways to get work done were evolved.

A new model was required as employees became more aware, talent started becoming scarce, and retaining that talent became a challenge for the employer. This is when Hierarchy-less or flat structure was proposed and experimented.

Hierarchy-less structure results in cohesive work environment, cordial relationship and reduces delays in the process of decision making. In the fast changing business environment it is really a challenge to retain the best talent and effective employees wish to get involved in the decision making. They want to own up responsibilities and take risk. Organizations have to have such facilitating structure which allows its employees to spread their wings and dream big for the organization. This is where Hierarchy-less structure helps.

There is a caution. It is not that hierarchies should be broken at all levels. Reporting channels have to be reduced and accountabilities have to be established at different levels in order to streamline effective functioning. When employees belong to Theory Y assumption, hierarchies would matter least. Further big manufacturing firms, heavy engineering firms, government departments etc., may have to wait for long to get their hierarchies reduced or broken much unlike their counterparts working in services sector.

So folks, if you aspire to work for a hierarchy less organization, you would have to make a choice depending on the sector you chose to work. It is not too bad to start with hierarchical organization, learn things and put forth effort to initiate conversion of tall into flat structure.