This structure is generally possible only in smaller organizations or individual units within larger organizations. When they reach a critical size, organizations can retain a streamlined structure but cannot keep a completely flat manager-to-staff relationship without impacting productivity. Certain financial responsibilities may also require a more conventional structure. Some theorize that flat organizations become more traditionally hierarchical when they begin to be geared towards productivity.
The flat organization model promotes employee involvement through a decentralized decision-making process. By elevating the level of responsibility of baseline employees and eliminating layers of middle management, comments and feedback reach all personnel involved in decisions more quickly. Expected response to customer feedback becomes more rapid. he "strong form" of a flat organization is an organization with no middle managers at all. Very small businesses may lack middle managers because there are too few staff to justify hiring middle managers; in this type of organization, the business owner or the CEO may perform some of the functions performed by middle managers in larger organisations.
However, some organizations do not take on middle managers even as they become larger, and remain extremely flat.
An organization which has self-managing teams, that organize their own work without the need for a middle manager or supervisor above the team, may meet or closely approximate this model. This can cause conflicts with people whose career path expectations include a promotion, which may not be available within the organization due to its flat structure. However, alternative "horizontal" career paths may be available, such as developing greater expertise in a role or mastery of a craft, and/or receiving pay rises for loyalty.
An absence of middle managers does not preclude the adoption and retention of mandatory work procedures, including quality assurance procedures. However, due to the fact that significant responsibilities are given to the team members themselves, if a team collectively arrives at the view that the procedures it is following are outdated, or could be improved, it may be able to change them. Such changes may, in some cases, require the approval of executive management, and/or customers (consider for example a digital agency producing bespoke websites for corporate clients). If executive management is not involved in the decision, or merely rubber-stamps it, this might be an example of consensus decision-making or workplace democracy at the level of a team - or group of teams, if multiple teams are involved in the decision.
Examples of companies with self-managing teams include:
37Signals, which has rotating, not permanent, team leaders. Some other digital agencies also use rotating team leads.