A flat organizational structure has few levels of management between executives and employees. The rationale behind such organisations is to make employees more productive by giving them greater input in the decision-making process. The organizational structure is best suited to small companies and enterprises.
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Flat organizational structures have fewer levels of management between top executives and workers. Hospitals use this organizational structure because doctors are well-trained employees that need to make quick decisions due to the nature of their job.
These organisations are designed to reduce bureaucracy and make employees more productive by encouraging employee involvement to make decisions and resolve problems. Communication flows more freely and easily between managers and employees allowing for more rapid responses.
There is greater communication between management and employees. Flat organizational structures also eliminate middle management allowing for quicker decision-making. Organizations using this structure can save money by eliminating middle management positions.
This organizational structure is best suited only to small organisations where decision making can be decentralised. Another potential problem is that an employee may be simultaneously reporting to two or three bosses.
Restaurants, universities, law firms, hospitals and Internet marketing companies all use this organizational structure.
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