Is a Flat Organizational Structure a Good Thing?

“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.

I do not think that flattening the organizational structure is a good idea.

On one hand a flatter structure can encourage collegiality and cooperation, as the statement says. People are less likely to be upset to find that somebody at a similar level is earning way more than them. This would also encourage cooperation as there will be no competition to get a little ahead in the race. This would undoubtedly cut the stress associated with the job.

On the other hand a flatter structure will discourage competition which will, in turn, discourage performance. Employees will not have any incentive to do things better than their peers. Such a culture may discourage performers and encourage mediocrity. The best performing people may tend to leave for organizations that take into account their hard work and desire to excel.

I feel that in essence flattening organizational structure is a populist, egalitarian, socialist step that can severely affect performance of a corporate on the whole. Like all grand socialist ideas they do sound good on paper but never work in the practical world as they are too idealistic. A better idea may be to encourage team work by linking rewards to both personal and team performance. People in general will not wake up to perform or be team players if it does not benefit them in a concrete way.

The cliched climb up the corporate ladder has to be visible in terms of milestones and rise in salary: which is the whole rationale behind having many ranks and salary grades. I agree that this creates rivalry but it also gives people reason to do things in a better way. However when performance is linked to team work along with individual performance, people will desist from being unnecessarily hostile to each other. Flattening the organizational structure is definitely not the answer in a capitalistic corporate environment.