Which is Better for Well-being: a Flat or Hierarchical Organization?


There is a tendency among startup organizations to idealize flat structures.
There are some that even avoid any formal structures at all. The uneasiness with hierarchical relations might derive from an egalitarian ideology.

How does a flat structure affect people’s well-being?
It depends on the expectations and reality.

For example, if a new employee is promised flat relationships in job interviews with phrases like “We are very close like friends. No formality at all. Very casual.” In reality, however, if a CEO or a manager is seen calling all the shots and making all the important decisions without listening to others, the person may feel disappointed or even betrayed.

On the other hand, a hierarchical structure is not necessarily bad. If all the team functions are clear and in accordance with what was promised in the initial interviews and job descriptions, it might actually contribute to people’s well-being, as things are more open and predictable.

In fact, avoiding a formal structure, whether be it flat or hierarchical, is not an ideal solution as unexpected informal structures often emerge. For example, if a person without a designated role has a ‘strong’ character and dominates others, it might have negative effects on others.

These issues caused by informal relationships are harder to deal with in an organization because they cannot be noticed by others, openly discussed, or solved through formal means.

In order to promote the well-being of a team, certain roles and relations need to be formalized, be it flat or hierarchical, based on the promises and ideals of the organization.