Unlike vertical and matrix organizational structures, a horizontal organizational structure has fewer layers, normally two or three. It doesn’t have much chain of command. The top position of the structure is the owner of the business. The second layer contains managers or team leaders who report to the business owner. The third layers are team members supervised by the managers or team leaders in the second layer. The horizontal org chart has eliminate many middle management levels, thus can be considered as an employee-centered with emphasis on teamwork and collaboration. Without going through complicated hierarchies, employees have more contact with managers and even business owner.
Due to the simplified structure, many organizations choose to implement the horizontal organizational model, especially some small firms who start up in their early stage.
Firstly, the horizontal organizational structure is an employee-centered approach that employees have a big part to play. They get more satisfaction due to the greater freedom and autonomy. Secondly, the cross-functional structure makes optimum utilization of resources across different teams. Thirdly, it’s cost-saving since they can save a great amount of money from hiring the middle management. Last but not least, the structure is quite flexible; business managers could easily adjust the priorities based on different tasks.
There may be contradictory between departments due to the responsibilities are interdependent, which can hinder productivity. It can also lead to a feel that every single employee who works in a small, flat organization lacks professional skill in his or her career path, because their effort is diluted. Everyone is becoming a “jack of all trades, master of none”. It dose not promote innovation and creativity, because of the breaking up of specialized lines of business.