Organizational design plays an important part in the organizational performance because the organizational design affects consistently relationships within organizations. At the same time, today, it is possible to trace the diversity of organizational designs which may vary consistently but roughly they may be divided into horizontal and vertical. Flat organizational design is an example of the horizontal organizational design, whereas bureaucratic organizational design is an example of vertical organizational design. However, today, new forms of organizational design emerge, such as boundaryless organizational design, which is different from traditional vertical and horizontal design. Nevertheless, whatever the organizational design is, it should meet needs and strategic goals of the organization to maintain effective organizational performance and healthy organizational culture.
On analyzing the diversity of organizational designs, it is possible to single out bureaucratic organization design as one of the classical forms of the vertical organizational design. To put it more precisely, bureaucratic organizational design implies the existence of the clear organizational hierarchy, where each employee holds his or her position and is subordinated to managers of the upper level of management and may have his or her subordinates, if the individual holds a managerial position in the organization. In such a way, organizations with bureaucratic organizational design have clear defined roles and responsibilities. At the same time, the main goal of the organizations using bureaucratic organizational design is to respect merit of organizations above all. In fact, the main goal of bureaucratic organizational design is to consolidate employees, set discipline and clear roles for each manager and employee. In such a way, organizations can maximize the effectiveness of performance as employees can focus on their specificс functions being subordinated and having clear goals to achieve. The strict control helps employees to do their best. However, this organizational design cannot be effective for a long time as employees grow tired of the permanent and strict control from the part of managers. In addition, organizations could use this organizational design in time of serious changes to facilitate the transition to new organizational designs or to complete restructuring of organizations.
Flat organizational design is quite different from bureaucratic organizational design and organizations use quite different business strategies, if they use flat organizational design. In fact, flat organizational design has a few or no level of intervening management between managers and staff. In such a way, employees have the large autonomy within organizations with flat design. They are free to take decisions autonomously of their managers. Obviously, employees can perform more effectively, when they have larger autonomy compared to bureaucratic organizational design. In fact, flat organizational design helps organizations to become more flexible and respond faster to challenges in their business environment. In such a context, organizations can use flat organizational design to stimulate the creative work of their employees, to introduce innovations, and to improve performance of employees because they feel free of managerial control in their work. At the same time, they feel confident in their importance for their organization and, therefore, they become more responsible in their work. On the other hand, flat organizational design raises the problem of the lack of control over the work of employees from the part of managers. In such a situation, organizations need to monitor performance of employees to identify possible problems and to introduce changes to improve their performance.
Today, boundaryless organizational design emerges as an alternative to conventional horizontal and vertical organizational design. Organizations using boundaryless organizational design are not defined by or limited to the horizontal, vertical, or external boundaries imposed by a predefined structure. To put it in simple words, boundaryless organizational design eliminates hierarchical boundaries or organizational boundaries developing connections not only within the organization but also outside organizations developing positive relations with customers and business partners (Amaral and Uzzi, 1034). Obviously, this organizational design is new and has a number of benefits because organizations become even more flexible than organizations with flat organizational design because employees are free to develop their organizational design respectively to organizational needs. In such a way, organizations using boundaryless organizational design focus on the effective and flexible business development. Boundaryless organizational design implies the use of diverse business strategy, when organizations operate internationally in diverse, multicultural environment.
Thus, taking into account all above mentioned, it is important to place emphasis on the fact that organizational designs may vary consistently. However, organizations can choose organizational design, which meets needs and strategic goals of organizations. In actuality, it is possible to distinguish bureaucratic organizational design, flat organizational design, and boundaryless organizational design. Each type of organizational design has its own advantages and drawbacks. Bureaucratic organizational design matches organizations, which need strict hierarchy and control, whereas flat organizational design is applied by organizations, which provide their employees with large autonomy. Finally, boundaryless organizational design helps organization to operate in multicultural environment and maximize autonomy of employees.
Amaral, L.A.N. and B. Uzzi. “Complex Systems—A New Paradigm for the Integrative Study of Management, Physical, and Technological Systems.” Management Science, 53(7), 2007, 1033–1035.