A vertical organizational structure is the traditional top-down setup where leaders pass down directions and guidelines to lower-level workers. A horizontal organizational structure refers to the level of collaboration that goes on across divisions and departments. Contemporary companies have become flatter, leading to more horizontal emphasis.
Traditional Vertical Organization
The traditional vertical organization is reflected in a standard organizational chart. It shows a hierarchy that starts at the top with the CEO or president. The next level down includes vice-presidents and other executive managers. Farther down, you see mid-level managers, and then front-line managers and their workers. The vertical structure promotes top-down, authoritative relationships between a manager and his subordinates. A primary benefit of this structure is the clear roles of managers and employees. Concentrated leadership and company direction are also benefits.
Drawbacks of the vertical organization contributed to significant efforts by large corporations to become more horizontal during the 1990s. A primary flaw is the distance between leaders at the top and workers at the bottom. This distance made it difficult for the majority of the workforce to get personal perspective from the top managers who control company direction. The vertical structure also promotes the "us versus them" feeling in a company, where managers and employees are pitted against each other.
The Horizontal Transition
All companies have some element of horizontal structure. The horizontal structure involves the interaction between employees in a work team or across divisions or departments. The sales department and shipping department must often discuss shipping policies and timelines, for instance. However, the goal of many large companies is to place even greater emphasis on a horizontal structure. The goal is to reduce the lines between top-level management and front-line managers and workers. Horizontal structures contribute to teamwork, input from employees engaged directly with customers and a sense of shared ownership of company objectives.
Horizontal structures do create obstacles. Leaders must back away from the traditional direction-oriented management role and shift toward a more communicative role. Horizontal leaders drive collaboration and synergy rather than task production. Trustworthiness and empathy are key traits of an effective leader in a horizontal structure. He must inspire trust to create trustworthiness in his workforce. He must show genuine concern for the personal and professional well-being of workers to compel them to optimized performance.