The American business model was established on a top-down, vertical bureaucracy. Decisions are made by the Executive level who dictates them to the Upper level, who challenges the Frontline managers, who motivate the troops. This has been good enough to build the largest economy in the world, but has it outlived it’s usefulness.
In many consultations with businesses, there is a recurring theme where decisions are being made in an attempt to increase productivity, but because there is no consultation with those who have to execute the directive, it meets with certain failure. This triggers the standard response of pressure, brow beating and questions of dedication and work ethics.
Additionally, there are decisions being made for product offerings by people who have never met their target market. I am reminded of a retailer I once worked for who unveiled a new 128 megabyte MP3 player for $249 at the same time Apple introduced the Ipod at 1 gigabyte for $299. As you can see their product entered the market at obscelesence. Why did that happen? Could it be because the buyer is a 45 year old bureaucrat who has no idea what an MP3 player is, never mind which version the intended customers would buy?
An organization with a horizontal structure allows each member of the team input on decisions and strategies that affect their job performance, product offerings and marketing. From the Executive level to the hourly employee each person is valued for their participation in getting the companies products to the end user. A horizontal structure allows each department to see the affect of their productivity on the next segment, provides brainstorming sessions for managers and staff and has an open door policy for new ideas. During my years as a Retail Manager, I found my marketing and advertising efforts were most effective when I was able to be among our customers. Conversations with our customers allowed me to make better buying decisions, manage inventory, work with vendors to produce items the customers actually needed and make the customer feel we had interest in their opinions.
Furthermore, a horizontal company allows decisions to be made faster and more efficiently because all team members work together and the analysis necessary to arrive at a final decision is simplified by the transparent nature of the corporate structure.