Horizontal vs. Vertical Organizations

Hi Rami,

I'll give a consultants answer to you question. It depends. It depends on the organizational business strategy decision its capabilities/resources to deliver its product, its service. I've worked in both organizations and if done right both can be successful. You have most of the control if you are vertical organization. You are more flexibility in horizontal organization.

Hi Rami,
I prefer vertical. In vertical org most of the expertise and knowledge is under one umbrella. In horizontal orgs depending what partnerships, alliances vendors vendors the expertise, processes, work is divided. If the expertise moves out for some reason or if the org doesn't own or even if they own proprietary info the time and money to have it replaced with someone else up to speed with that knowledge is a disadvantage and a risk for that org.

Regards,
Igor

Hi Rami,
Good question. Having worked in organizations Vertically and Horizontally oriented and also one that had a cross between the two, I think each of these structures have their pros and cons and an organization in the long term will need to switch through these structures intelligently to survive.

In my observations, when the key driver of a workforce is discipline and not raw talent, then vertical structures work the best. This structure will drive efficiency and the work force feels more secure in this structure.

But, if the key driver of a workforce is raw talent and creativity, then the vertical structure is very constricting. In such scenarios horizontal structure is more efficient. This structure will increase the chances for people to contribute creatively, but also feel enabled to discuss ideas in a very open-minded manner.

In theory a mixed approach is supposed to marry the benefits of the above two and eliminate the downsides, but in reality the opposite is what happens and I feel that this structure causes more damage than gain.

In today's world, every organization goes through a phase of rapid changes when due to technology changes or geo-political changes an organization needs to change rapidly. In such situations the discipline of a vertical organization helps a lot. On the other hand, as ground changing innovations change the landscape of industry in a very short period of time, organizations need to have the horizontal organization to adopt and innovate.

Most of the big organizations like IBM, Siemens etc. have a certain parts of the organizations vertical while certain other parts are horizontal to cope with this situation.

Finally, my last bite at this is that at the end of the day, the structure is only as effective as the people who drive it. So even if a structure is not most optimal for an organization, if the people driving that structure or managing within that structure are capable, the organization will do just fine!!

Cheers!
Ram