Horizontal Organizational Structure

Companies use an organizational structure to define their hierarchical constitutions. This structure ensures that every employee in the organization knows to whom he must report. Small companies usually adopt a horizontal organizational structure.

Features

The levels of command in companies that follow the horizontal organizational structure are very limited. The employees often report directly to the company’s owners. Hospitals, hotels, parlors and schools usually use this structure.

Significance

A horizontal organizational structure vests employees with decision-making powers. Managers trust their employees’ judgments and instincts, and give them the authority to make changes to products or services per the customer's requirements.

Limitation

As the scale of operations and the size of the company grow, it becomes impractical to use a horizontal organizational structure. The need to departmentalize strategic functions and centralize authority arises.

References

• LearnManagement2.com: Flat Organisational Structure
• Practical Management: Structural Dimensions of an Organization