Why flat structures don’t work in business

Companies that have rejected hierarchies have typically lacked diversity.

An array of modern companies and organizations that have experimented with or embraced a flat, or nonhierarchical, corporate structure have found that removing layers of management and designing businesses around democratic decision-making is counterproductive.

Flat structures tend to work best at smaller companies, including start-ups.

But as firms hire more employees, they typically encounter significant challenges in coordinating their employees.

New-age cultural zeitgeists may believe that hierarchies are bad, but nonhierarchical structures aren’t trusted.

There’s some degree of suspicion around them, and they discourage employees from being productive because there are no clear lines for potential advancement.