Vertical and horizontal organizational structure refers to the way in which power is distributed within a system. A business with a vertical organizational structure is one in which there are levels of power and command. A horizontal organizational structure is a structure founded on collaboration between individuals and the equal distribution of power.
Vertical organizational structures are prevalent in many societies. Educational systems and governmental systems are built upon the concept that authority belongs to few and obedience to many. These structures are hierarchical, with graduating levels of responsibility and power in one direction and diminishing levels of autonomy and authority in the other.
Horizontal structure, or flat organisation, as both names imply, is the level distribution of power. Advocates of horizontal organisation, such as author Wendell Krossa, maintain that vertical organisation is based on the atavistic structures of power and coercion and is kept in place by competition for power.
Benefits of Vertical Structure
Largely, businesses have modelled their systems of organisation after vertical structures. Vertical structure can be efficient because there is ultimately one point of authority to make decisions and execute initiatives.
Benefits of Horizontal Structure
Successful horizontal organizational structure allows each individual within a system to have and assert a unique perspective and in so doing, add to and shape the company in which he works. Eliminating the hierarchical nature of vertical organisation deemphasizes the value of power and underlines the value of collaboration, which balances or "flattens" power within these structures.
The Future of Business
According to Frank Ostroff, author of "Horizontal Organization: What the Organization of the Future Actually Looks Like and How it Delivers Value to Customers," horizontal structures of organisations are more appropriate for the information age. Because the information age affords equal access of information to all, the decentralisation of traditional power structures is imminent. Ostroff contends that businesses will be able to efficiently address customer needs and capitalise on employee competencies by deconstructing the hierarchical nature of vertical organisations and redistributing power to establish horizontal, or flat, organizational structures.