It is typical within an organization, though it will depend on its size, to find regional managers (who manage a geographical region that the organization operates in), divisional managers (who manage a particular division within an organization e.g. human resources, finance, sales, etc.), and departmental managers (who manage the departments within the divisions).
The way regions, divisions, departments and people link together and interact is set out in a management structure (sometimes also referred to as an organizational structure). The two main types of such structures are flat and hierarchal.
Organizations that have few or no levels of management that intervene between the workers and the leaders are employing what is known as a flat management structure. A flat management structure promotes the involvement of staff in the decision making process by decentralizing said process.
A flat management structure can help to speed up decision making, as it promotes real time suggestions and commentary from the front line workers, and eliminates middle management. This structure promotes frequent communications and results in a more personal relationship between staff and leaders of the organization.
Within a hierarchal management structure each person is charged with reporting to, or dealing with, a specific manager, who then takes information up (or down) the chain. In this structure, each body within the organization, except one, is subordinate to an immediate supervisor.
Such a structure is best visualized as a pyramid, where the height of a person depicts their status, power and influence, and the width of that level represents how many people or business divisions are at that level relative to the whole. The highest ranking people are at the apex, and there are very few of them. The base may include thousands of people who have no subordinates.
The benefit of a hierarchal structure is also its primary limitation in that it will reduce the level of communication that goes directly to the top. The hierarchal configuration, however, is the most prevalent for large corporations, governments, and even organized religions.
Flat management structures will typically only work well in smaller companies, or within smaller defined units of a large organization. Once an entity reaches a certain size, this type of structure will not work as well and could end up having a negative impact on productivity. Certain financial responsibilities may also require a more conventional structure, and some theorize that flat organizations become more traditionally hierarchical when they begin to be geared towards productivity.
An organization s complexity can be related to its size and how widely distributed it is geographically, and it is this complexity that governs which management structure is most beneficial to it. In that respect, there is no straight answer as to which management structure is best overall.
Whichever management structure is implemented need to be regularly reviewed to ensure that an organization and all of its subsystems (processes, departments, teams, employees, etc.) are working effectively to achieve the results desired by the organization. Such reviews (referred to as performance management) can be carried out on a general basis, or on units of performance, such as quantity, quality, cost or timeliness.
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