The Difference Between Hierarchical and Flat Structures in Businesses

Entrepreneur contributors do not necessarily agree with the opinions expressed.
It would be foolish to dismiss traditional pyramid-shaped corporate hierarchies. They've survived for many years for a reason. They allow for the efficient coordination of large groups in a predictable and stable manner.

A second point is that it is almost impossible to have a complete absence of hierarchy within organizations or in social life. Even the most basic, voluntary structures (e.g. There are implicit, intrinsic hierarchies within a group of friends.

These hierarchies do not have to be rigid. Although one person may have greater authority in certain situations, another person might be more effective in other situations. They are dynamic and can be influenced by others. They are, however, in some ways unavoidable.

We are not trying to achieve perfect flatness by aiming for a flat hierarchy. We are merely referring to a hierarchical structure which is less explicit, more dynamic and flatter, although not perfect.

It is important to remember that a startup does not have to be a large corporation. With size come qualitative differences.

Related: The Danish Flat Hierarchy - Help or Hassle?

Corporations thrive when they are stable and fail when they become volatile. Once a corporation has discovered its winning formula, it is able to sustain itself by maintaining stability and growing incrementally.

Startups are, in fact, the exact opposite. Startups often start without a business model and sometimes even a product. It must constantly reinvent itself and invent to survive. Startups are volatile by nature. They survive by constant innovation and exponential change.

Corporations need to be as predictable as possible. Startups need a structure that encourages creativity, flexibility, as well as anti-fragility.

Related: Rationalizing Businesses With Self-Management

Employees won't be motivated to try new things, take risks and innovate if there is a rigid pyramid structure. When you're trying to create a startup culture and build a team, this is something to consider.

It is essential that the early startup team includes people with entrepreneurial skills. People who are not attracted to corporate culture or structure will be unable to succeed. Their intolerant of rigidity may be what draws them to the startup world.

As a founder of a startup, it is your primary responsibility to create a supportive environment for your team. While every case is different, it's a general rule that startups thrive in a more dynamic, flatter structure. Startups are small organizations, so they have a greater resemblance with a family or small sports team than a large corporation. To survive and thrive, it needs a more organic, flat structure.

Similar Articles: Modern Organizations: How to Move Forward