Workplace Organizational Structures: The Pros & Cons of Hierarchical, Flat, and Functional Workplaces

Over the past few weeks, we’ve discussed how to build the best global virtual team, the challenges of working virtually and cross-culturally, and how to best manage such a team.

One of the cross-cultural challenges discussed was differences in norms regarding organizational structures in the workplace.

Some cultures prefer a hierarchical structure with a clear chain of command. Others prefer a flat structure, which is often more collaborative.

Over the next couple of posts, we’ll discuss various organizational structures.

Knowing about these structures as a manager will help you understand how others might be accustomed to working.

Hierarchical Structure

The hierarchical structure is probably the most common organizational structure in a workplace.

It has a clear and direct chain of command, with a senior manager at the top, followed by various departmental executives, followed by supervisors/team leads, all the way down to general employees.

Those at the highest level – the CEO, for instance – have the final say in decisions.

The CEO’s decisions may, however, require approval by a board of directors.

Each structure has its pros and cons.

Hierarchical pros:

  • Provides clear career paths
  • Offers a clear chain of command, thus reducing conflict
  • Helps businesses streamline processes
  • Leaves little room for dissent from those low on the chain (which can be good or bad, depending on how you look at it)

Hierarchical cons:

  • May negatively impact employee morale
  • Can slow decision-making processes, as approval is needed
  • May stunt innovation and creativity, as fewer are allowed the power to make decisions

Flat Organization Structure

Small businesses and startups typically use a flat organizational structure.

They must often adjust to a stabler structure once they move past the startup stage.

As you may have guessed, this structure is much less hierarchical with fewer middle managers between the lower-level employees and top dogs.

Flat pros:

  • Less supervision required
  • More responsibility given to employees
  • Trust and open communication
  • Greater employee involvement and ease of coordination

Flat cons:

  • Potential for more conflict and confusion
  • Sometimes slows decision-making processes, as people cannot agree
  • May stunt specified skills or knowledge

Functional Structure

A functional structure involves departments made up of specialized work functions, each with a designated and experienced leader.

The decision-making process is generally centralized in this type of organization, with department heads reporting to upper management.

The team leads communicate with each other to coordinate, and the team members below them typically have little involvement with that process.

Functional pros:

  • Employees focus on specialized tasks
  • Each department fosters teamwork toward a joint goal
  • Is scalable no matter the size of the business

Functional cons:

  • Coordination can be lacking
  • Big picture context is lost on lower-level employees
  • Company processes and strategies can become confused

As you can see, each organizational structure strong and weak points.

The type of structure you choose should be best suited to the business you’re running.

Without a strong structure that supports your business and the type of work culture you wish to promote, you will face difficulties in productivity, coordination, communication, and overall morale.

Next week, we’ll talk about four additional workplace organizational structures.

How Culture Impacts a Person’s Sense of Control (aka Locus of Control)

Do you believe in fate?

Last week, we talked about how the degree to which someone feels life is directed by destiny dictates their locus of control – that is their feeling of control over their own lives.

Let’s look at how the locus of control unfolds in the workplace.

The Blame Game

When a goal is set and not reached in a workplace environment, the reactions of your colleagues can be very telling.

Sheila blames Jeremy for not delivering the documents in time for her to complete her task.

Jeremy blames Tom for not communicating promptly.

Tom blames his home life for distracting him.

Team Leader Lisa admits she missed the mark and should have taken the campaign in another direction. She apologizes for the part she played in not meeting the goal.

People with an internal locus of control take personal responsibility for their role in a group’s failure, while those with an external locus point at everyone else but themselves, whether they see fault in the “weakest links” of the group or in external factors.

Cross-Cultural Factors

How do cross-cultural factors come into play in the locus?

The locus of control is directly related to personality orientation; however, social psychologists have begun to study the majority locus of control in various cultures and the factors that influence it.

They’ve discovered that quite often the people of any given culture look at fate or self-control in a generally collective manner.

As you may have guessed, individualist cultures generally demonstrate an internal locus of control. They believe they’re the masters of their own fate.

Collectivist cultures – like those of China or Japan – demonstrate an external locus. They accept that things are out of their hands and don’t put weight on the individual’s role in the whole.

To illustrate this, when Americans and Chinese were surveyed about their view of fate, these were the results.

locusofcontrol

89% of questioned Americans agreed with the statement, “What happens to me is my own doing,” while 65% of Chinese admitted, “Sometimes I feel I don’t have control over the direction my life is taking.”

This aligns with each culture’s dominant traits, with Americans espousing ambition, individualism, and the “American dream,” while China espouses harmony and collectivism.

Next week, we’ll talk a little bit about how the group locus of control can be divided up further amongst ethnic groups and even simply locations in the same country. We’ll also talk about primary and secondary control. Stay tuned.