5 Organization Structure
Organizational structure is a visual diagram of a company describes: what employees do, whom they report to and how decisions are made.
In this section, I will introduce 5 organization structure.
Highlight Vocabulary
Traditional Hierarchy
Flatter Organization
Flat Organization
Flatarchy
Holacratic Organization
Traditional Hierarchy
The traditional hierarchical model arranges individuals within the organization according to power. At the very top level, the organization has a board of directors followed by the CEO. Under the CEO, the organization has other executives. This level of executives typically have upper management under them including vice presidents, managers and directors. Depending on the size of the organization, department heads usually follow upper management followed by regular employees whose levels are categorized according to experience and authority.
Flatter Organizations
A “flatter” structure seeks to open up the lines of communication and collaboration while removing layers within the organization. As you can see there are fewer layers and that arrows point both ways. Obviously a very simplified way to look at this type of a company but hopefully it gets the point across. For larger organizations this is the most practical, scalable, and logical approach to deploy across an entire company. This is the model that most large (and many mid-size) organizations around the world are moving towards.
Flat Organization
Unlike any other corporate structure that exists, there are usually no job titles, everyone is seen as equal. Flat organizations are also oftentimes called or referred to as self-managed organizations (there can be some differences but for our case we will put them together). The most famous example of this comes from Valve, the gaming company responsible for classics such as Half-Life, Counter-Strike, Portal, and many others. At Valve there are no job titles and nobody tells you what to work on. Instead all the employees at Valve can see what projects are being worked on and can join whichever project they want. If an employee wants to start their own project then they are responsible for securing funding and building their team. For some this sounds like a dream for others, their worst nightmare.
Flatarchy
Somewhere in between hierarchies and flat organizations lie flatarchies. These types of companies are a little bit of both structures. They can be more hierarchical and then have ad-hoc teams for flat structures or they can have flat structures and form ad-hoc teams that are more structured in nature. Organizations with this type of structure are very dynamic in nature and can be thought of a bit more like an amoeba without a constant structure.
Holacratic Organizations
Holacracy started gaining lots of traction after Zappos announced that they would be shifting to this new model of working. The media has picked up on this as a “boss-less” organization which hardly describes what holacracy is about, again check out the podcast link above. There are actually quite a few organizations that have been experimenting with this model but the most known are of course Zappos and Medium. The basic goal with this structure is to allow for distributed decision making while giving everyone the opportunity to work on what they do best. There is still some form of structure and hierarchy but it’s not based on people as much as it based on circles or what most people would think of as departments. Information is openly accessible and issues are processed within the organization during special and ongoing meetings.
