Vertical and Horizontal Differentiation | Organizational Design | MeanThat
What is vertical organizational structure?
Vertical organizational structure is a pyramid-like top-down management structure. In these organizations, roles are clearly defined, with top leadership followed by middle management and then regular employees. A decision is typically made from top to bottom, but the approval of work is typically done from bottom to top.
Vertical organizational structures define a clear chain of command. Middle managers are informed of decisions made at the highest levels of management regarding standards for sales, marketing, customer service, and other areas. Middle managers delegate tasks to staff members and convey procedures and objectives Work is completed by employees, and then it is approved by upper and middle management.
What is horizontal organizational structure?
Horizontal organizational structure is a flat management structure. These types of organizations frequently have fewer managers than employees and permit employees to make decisions without seeking manager approval. Giving staff members autonomy frequently boosts their motivation and sense of power, deepening their connection to the business and its objectives. Additionally, the lax design of horizontal organizational structures frequently naturally promotes cooperation.
Differences between horizontal vs. vertical organizational structure
Here are some differences between horizontal and vertical structure:
Who makes decisions
Decision makers vary in each company and organizational structure. However, in vertical organizational structures, the only managers with decision-making authority are frequently those at the highest levels. In contrast, horizontal organizational structures frequently give employees the authority to make decisions about specific matters, and they may only occasionally need manager approval.
Number of managers
Different employee levels and types may be found in various organizational structures. Vertical structures often have many managers. These structures include middle-level managers and upper-level managers. But horizontal structures frequently have a small number of managers overseeing a large number of independent workers.
Level of employee input
Different organizational structures embrace different levels of employee input. Horizontal organizational structures promote employees’ idea sharing and suggestions for process improvement. Some businesses permit personnel to make changes without manager approval. Vertical organizational structures, on the other hand, hardly ever solicit feedback from their workforce, expecting them to obediently carry out their managers’ orders.
Flow of communication
In vertical structures, communication is frequently slow and limited to department heads or managers. The middle management levels may hinder communication or cause miscommunication, which could impede project progress. Because employees are free to converse with one another as much as they want, communication is frequently more fluid in horizontal structures. This may help improve productivity and efficiency.
Level of efficiency
Complex approval procedures are frequently found in vertical organizational structures, and they can be cumbersome and ineffective. Typically, when employees finish their work, their direct managers must approve it before upper managers do so. However, horizontal organizational structures often empower employees. As a result of the few or nonexistent approval processes, businesses with these structures are frequently more productive.
Level of creativity
Horizontal structures often allow employees more freedom. They can be creative and try new things. However, vertical structures give employees little to no autonomy and emphasize rigid procedures. However, some businesses now employ vertical structures and a waterfall methodology, which encourages staff members to be inventive or creative within their own departments.
Amount of collaboration
Different organizational structures have different levels and types of collaboration. Often, horizontal organizational structures promote collaboration and enable it to occur naturally. These arrangements enable staff to experiment and work with various departments. However, employees in vertical organizational structures frequently only collaborate with those in their own department and only have formal meetings or collaboration.
Willingness to take risks
Vertical structures are frequently less willing to take chances than horizontal structures. Because of their defensive stances taken by department leaders or managers to guard against potential failure, vertical organizational structures may be more risk averse. Conversely, horizontal structures encourage brainstorming and alternative ways of thinking. These structures might view risks as having potential benefits rather than potential drawbacks.
Job satisfaction
Employees who work in horizontal organizational structures are frequently empowered to try new things. This frequently fosters greater employee engagement, which raises job satisfaction levels. Employees who value rules and procedures, however, might favor vertical organizational structures
Amount of structure
Organizational structures that are vertical frequently have more structure than those that are horizontal. The degree of employee autonomy is decreased by vertical structures’ clearly defined roles and specific responsibilities for each person. Horizontal structures are less structured and frequently offer equal employment opportunities. However, this might result in a lack of direction or cause internal strife.
Tips for choosing between vertical vs. horizontal organizational structure
You can choose between a vertical or horizontal organizational structure using the following advice:
1. Review your companys strategy
Consider your companys strategy. Your company’s strategy, objectives, and goals are frequently the most crucial considerations when choosing the ideal organizational structure. Consider the work your business performs, the industry you serve, and the requirements necessary to keep it competitive.
2. Consider the size and age of your organization
Think about the size and age of your organization. For larger organizations, vertical organizational structures might be a better option because they provide structure. Vertical organizational structures may also be beneficial for start-up businesses because they can guide them toward success and can be scaled as the business expands.
3. Think about your clients
Think about which organizational structure may better benefit your clients. Vertical organizational structures have stricter approval procedures, which may make them more appropriate for companies serving a certain clientele. However, employees in horizontal organizational structures may be more diverse and have more creative freedom. This may make these organizational models more suitable for businesses that provide services to a wide range of clients.
4. Think about growth opportunities
Consider the potential growth opportunities for employees. While horizontal organizational structures may offer more opportunities for employees to grow, vertical organizational structures may offer clear paths for advancement. Employees can learn new skills because horizontal structures frequently give everyone the same opportunities for success and levels of responsibility.
5. Consider implementing a hybrid strategy
FAQ
What is a horizontal organizational structure?
Flat or horizontal organizational structure An organizational structure with only a few layers of management is known as a horizontal or “flat” structure. In a flat structure, managers typically have a short chain of command and a wide range of control over more subordinates.
What is a vertical organizational structure?
Power flows from the top to the bottom in the strict hierarchical vertical organizational structure. When the chain of command is clearly defined, decisions typically flow layer by layer from the top down, with the lowest levels of authority.
What are the advantages of a vertical organizational structure over a horizontal organizational structure?
Benefits of Vertical Organizational Structures Companies with vertical organizational structures excel at assigning tasks to employees or departments and have uniform standards. Generally, managers have an easier time managing vertical organizations. In a vertical organization, the roles and responsibilities of the staff are clearly defined.
What is a horizontal organizational structure by example?
A horizontal structure only has two or three chains of command, according to Org Chart. For instance, a horizontal organization might have the company owner at the top, followed by a layer of managers or team leaders, and the remaining employees beneath them at the same level of the hierarchy.
