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Keeping it on the level: is a horizontal structure right for your business?

April 10, 2012 - Tags: Managing, Employers

Many businesses are organized like a pyramid: decisions are made by those at the top and executed by lower-level employees. But is this the best way to encourage innovation and productivity?

A horizontal organization also has a pyramid shape, but it's much broader and flatter. This type of structure is characterised by a short chain of command and decentralized decision making.

Adopting a flat organizational structure could help you:

  • Become more flexible and adaptable to change
  • Streamline the decision making process
  • Create opportunities for employees to develop new skills
  • Encourage collaboration and group problem solving
  • Spend less money on managers' salaries

Instead of promoting your most talented employees to management roles — which takes them away from the job they excel at — you can reward them for making use of their specialized skills.

However, horizontal structures are not right for every business and can come with challenges:

  • May not be suitable for complex strategic decision making (deciding the future direction of your business, for example)
  • Employees may want to move up the ladder and assume managerial roles
  • Lack of hierarchy can lead to confusion over responsibilities

For a horizontal structure to be successful, it's important that information and knowledge is shared openly with team members. Leaders will need strong leadership skills and must be able to nurture employee development. Make sure your employees have access to the right training and make sure they have the essential skills needed to do the job.

Identifying goals and setting benchmarks can help your employees work towards a common goal and can help you measure performance.

Visit our organizational design section to learn more about choosing a business structure.

Comments

Please call regarding our desire to start a new business in Canada to manufacture adjustable work platforms that already have the eye of the likes of popular hardware stores. The patent pending prototypes have been developed in the U.S. but the investors are both Canadian and American and one or more Canadian locations are desired by utilizing a current manufacturer or perhaps a new operation. Territories will also be available for distributors. We do not want to spin our wheels in program applicability searching with other organizations, so we are hoping you can be of assistance. We are on an accelerated schedule due to growing product interest and in a rush to develop the network necessary to broaden our start-up footprint in order to prevent loosing market share as the economy begins to pick up and those who would use the product being in a position to obtain more work, let alone existing situations.

By William on April 20, 2012

Hello William,

If you are looking for government grants, loans and financing, you can use our search tool. The tool allows you to specify your type of business and the Canadian Province or Territory in which you will be starting your business.

For more information on starting or growing a business in Canada, contact the Canada Business service centre of your choice or call toll free 1-888-576-4444 (TTY 1-800-457-8466).

By Canada Business on April 23, 2012

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