Can there be an “Ideal Organizational Structure” for an Employee?

Talks about commonly used organizational structures and their pros and cons. Also, the ideal scenario for an employee to work.

Coffee vector created by pch.vector — www.freepik.com

In this blog, we will understand the organizational structure and which two organizational structures are most commonly used. We will discuss the pros and cons. Then we will see an ideal scenario for an employee to work and prosper his/her career.

Let’s first understand what is an organizational structure?
In simple terms, it means how you want to define the different roles and responsibilities of your organization to different people. The work should be assigned in such a way that the required goals of your organization are accomplished within the time boundaries. Also, it defines how the leadership is distributed throughout the organization. “How will the information flow in an organization?” is also included in an organizational structure.

Most of the organizations either adapt flat or hierarchical structure. Henceforth, I will be referring to Flat organizational structure as Flat OS & Hierarchical organization structure as Hierarchical OS.

Let’s jump onto Flat OS
It is sometimes referred to as a horizontal structure. As the name suggests, the structure is flat. That is there are fewer or no levels between leaders and employees. The gap between them is less i.e. almost negligible.

Pros of Flat OS

1. Communication is faster(as fewer levels are involved), so goals are achieved in less time.
2. Responsibility of individual increases and gives him/her the feeling of being connected to the organization. They are more likely to stay loyal.
3. As there is less management involved in between leaders and employees, it saves the salaries of management people and hence organization budget costs are reduced.
4. The decision-making process is rapid and flexible as there is no need to get approval from management people. The involvement of employees is more in decision making.
5. Transparency in everything is also a big advantage here.

Cons of Flat OS

1. Flat OS produces generalists(jack of all trades) and fewer specialists(master of one).
2. Complexity increases as too many people are involved in making strategies and deciding objectives.
3. There is no direct reporting to the boss/leader, so one may get lenient with the work.
4. The job role of an employee is not clearly defined. Everyone contributes/interferes in everything. It stops the development of employees in the field of focus.
5. Fewer opportunities for promotion and leadership in Flat OS.

Moving to Hierarchical OS

Hierarchical OS is like the pyramid with CEO or chairman at the top and the remaining organizational structure is beneath them. It has different tiers/multiple layers of management in between CEO and employees. It is like a vertical chain of command, as the communication flows from top to bottom levels of the pyramid.

Pros of Hierarchical OS

1. There are good opportunities for promotion and leadership, this motivates the employee to perform well.
2. Hierarchical OS produces skilled specialists(master of one). An employee can narrow its field of focus and become an expert in that domain.
3. Hierarchical OS is more systematic, as an employee knows whom to approach and where to get help from.
4. Job roles are clearly defined, and employees know their career path.
5. Complexity is less as managers have limited subordinates to manage and guide. Employees are assigned to various managers for the proper functioning of an organization.

Cons of Hierarchical OS

1. Salaries for multiple layers of management increases an organization’s costs.
2. Communication is less effective across the departments. Increased time taken for communication between departments can lead to a delayed response to clients.
3. Employees are less involved in decision making so they might feel less connected to the business.
4. Employees are more loyal to their respective departments rather than the company as a whole.
5. Decision making is less flexible as the strategies and objectives need approval from various departments of an organization. Also, every department makes decisions which will benefit them, coming to a common page is time-consuming and difficult.

Now that we have a basic idea of flat OS and hierarchical OS, let us discuss which OS will benefit the employee.

Disclaimer: Below analysis is based on the short survey conducted by our team.

According to our research and short surveys with IT people, I have found that in big companies there are more office politics as compared to small scale ones mainly for promotion in the hierarchy. Sometimes the result of office politics can lead to the promotion of an employee who doesn’t deserve to be high in the hierarchy. Deserving employees still remain in the same position. Keeping this in mind, many companies have framed strict policies to avoid it, but still, the problem persists. Sometimes the strict policies raise problems, e.g. keeping criteria while hiring employees may result in losing a deserving candidate.

Suggestion: To have a strong management team who is unbiased and trustworthy to the company’s norms, ethics and values. The performance review system of the company should be concrete and transparent to everyone. Performance review system should have skillset as a major entity to judge an employee.

The problem with a startup or small company is overall management is not strong as it is in MNC’s. Let it be the management of projects or resources, they lack behind. Also, policies are loosely defined. The major focus in such companies is on quick implementation rather than following proper SDLC steps. Here, an employee may be asked to do things which do not fall under him/her. Also, salaries are sometimes irregular.

Then what will be an ideal scenario for an employee?

Organization where employee and employee’s talent is respected, where he/she can have true justification to work-life balance factor, Employee is growing personally as well as contributing to the organization’s success, etc. He/she should get such an environment where he/she feels motivated.

So whatever organizational structure you follow, make sure you are caring for your employee. It is like nurturing your plants [employees] to make a beautiful garden[company] and get fruits[profits] from it.

Till then, keep learning and keep exploring!! Cheers!!!