Functions and Effects of ‘Flat’ Organizations

A Case study of an internet media company

Abstract

Flat organizational structures have been attracting interest as an alternative of hierarchical organizations. It is often argued that a flat structure enables quick environmental adaption, and reduced communication cost. However, the operation and management process of an internet media company demonstrates an opposite finding. In this case study, the interaction based structure entailed a higher communication cost because communication paths within the organization are undetermined, and equality among members requires persuasion and understanding. In exchange, this structure improves organizational performance such as increasing the sales. Therefore, the essence of flat organization is not non-hierarchical structure, but to require an account to members strictly and set minimal regulations not to inhibit interactions among members. The main purpose of this paper is to understand and describe how interaction based organization operates and manages itself. Furthermore, it also seeks to illustrate how management and creative processes are undertaken by knowledge workers. For this purpose, K. Weick’s concept of “organizing” and “retrospect” could be useful for observers, as well as members of the organization. Likewise, N. Luhmann’s autopoietic system theory could be also useful to understand how an organization creates its identity and cooperation in spite of the fluidity stemming from free communication paths and minimal rules and regulations inside flat organizations.