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“Corporations and other businesses should try to eliminate the many ranks and salary grades that classify employees according to their experience and expertise. A ‘flat’ organizational structure is more likely to encourage collegiality and cooperation among employees.”
Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.
The non-hierarchical or “flat” organizational structures assimilate pay levels and ranks among employees, which has both its benefits and drawbacks. On one hand, such structures may bring important advantages to work environment such as positive team atmosphere, better understanding among colleagues as well as creativity and freedom coming from the fact that there are no superiors. On the other hand the level of control and professionalism in such companies may be put into question. Nevertheless, in the more thorough analysis of this issue I believe that the success of non-hierarchical or “flat” organizational structure depends both on the size and the type of business.
In my opinion, small companies in software engineering industry benefit largely from “loose” organizational structure. The main reason for my view is that there is a pool of small software companies successfully operating on this principle. Those companies are usually outsourcers for larger companies (e.g. Mac, Oracle, Microsoft), and almost all team members are software engineers with more or less same level of experience and knowledge about programming. In such small companies which usually have up to 20 employees, there are no traditional positions like Manager or Director, but instead all employees have positions of Programmers. Given the size and the type of software outsourcers, a business in which it is of crucial importance to deliver a project on time working closely with other team members, I can conclude that decision making is very simple, based on consensus, and that there is no need for more complex hierarchy.
The other reason why I think that “flat” organizational structure is case sensitive is the example of large construction companies in which this approach would not work at all. Such companies have employees whose level of education, experience and skill set largely differ – on one side there are highly educated managers and on the other side there are unskilled seasonal workers. In such companies non-hierarchical organizational structure would be counterproductive, because as an organization grows in size decision making process becomes more important. Also, each position in larger companies has its own level of responsibility, salary grades and fringe benefits packages based on the education and experience. It would be unfair and illogical to provide all employees with the same employment packages given large discrepancies in education and skills set.
In conclusion, I believe that there is no universal organizational structure which could fit all sizes and all types of businesses. While “flat” organizational structure can be beneficial for small businesses with less than twenty employees, it can have serious drawbacks in larger companies.